Correlation Between Kingdee International and Martifer SGPS
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Martifer SGPS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kingdee International and Martifer SGPS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingdee International Software and Martifer SGPS SA, you can compare the effects of market volatilities on Kingdee International and Martifer SGPS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kingdee International with a short position of Martifer SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Martifer SGPS.
Diversification Opportunities for Kingdee International and Martifer SGPS
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kingdee and Martifer is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Martifer SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martifer SGPS SA and Kingdee International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kingdee International Software are associated (or correlated) with Martifer SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martifer SGPS SA has no effect on the direction of Kingdee International i.e., Kingdee International and Martifer SGPS go up and down completely randomly.
Pair Corralation between Kingdee International and Martifer SGPS
Assuming the 90 days trading horizon Kingdee International is expected to generate 1.87 times less return on investment than Martifer SGPS. In addition to that, Kingdee International is 2.23 times more volatile than Martifer SGPS SA. It trades about 0.03 of its total potential returns per unit of risk. Martifer SGPS SA is currently generating about 0.13 per unit of volatility. If you would invest 165.00 in Martifer SGPS SA on October 25, 2024 and sell it today you would earn a total of 5.00 from holding Martifer SGPS SA or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Kingdee International Software vs. Martifer SGPS SA
Performance |
| Timeline |
| Kingdee International |
| Martifer SGPS SA |
Kingdee International and Martifer SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Martifer SGPS
The main advantage of trading using opposite Kingdee International and Martifer SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Martifer SGPS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Martifer SGPS will offset losses from the drop in Martifer SGPS's long position.| Kingdee International vs. American Eagle Outfitters | Kingdee International vs. GEAR4MUSIC LS 10 | Kingdee International vs. NTG Nordic Transport | Kingdee International vs. Warner Music Group |
| Martifer SGPS vs. CANON MARKETING JP | Martifer SGPS vs. CarsalesCom | Martifer SGPS vs. Canadian Utilities Limited | Martifer SGPS vs. Tradeweb Markets |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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