Correlation Between Kingdee International and GrafTech International
Can any of the company-specific risk be diversified away by investing in both Kingdee International and GrafTech International 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 GrafTech International 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 GrafTech International, you can compare the effects of market volatilities on Kingdee International and GrafTech International 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 GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and GrafTech International.
Diversification Opportunities for Kingdee International and GrafTech International
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kingdee and GrafTech is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of Kingdee International i.e., Kingdee International and GrafTech International go up and down completely randomly.
Pair Corralation between Kingdee International and GrafTech International
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 0.72 times more return on investment than GrafTech International. However, Kingdee International Software is 1.39 times less risky than GrafTech International. It trades about 0.0 of its potential returns per unit of risk. GrafTech International is currently generating about -0.02 per unit of risk. If you would invest 200.00 in Kingdee International Software on November 1, 2024 and sell it today you would lose (72.00) from holding Kingdee International Software or give up 36.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. GrafTech International
Performance |
| Timeline |
| Kingdee International |
| GrafTech International |
Kingdee International and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and GrafTech International
The main advantage of trading using opposite Kingdee International and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International's long position.| Kingdee International vs. PRECISION DRILLING P | Kingdee International vs. H2O Retailing | Kingdee International vs. CSSC Offshore Marine | Kingdee International vs. Tradegate AG Wertpapierhandelsbank |
| GrafTech International vs. Zijin Mining Group | GrafTech International vs. Kingdee International Software | GrafTech International vs. De Grey Mining | GrafTech International vs. MACOM Technology Solutions |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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