Correlation Between Kingdee International and Transport International
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Transport 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 Transport 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 Transport International Holdings, you can compare the effects of market volatilities on Kingdee International and Transport 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Transport International.
Diversification Opportunities for Kingdee International and Transport International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kingdee and Transport is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of Kingdee International i.e., Kingdee International and Transport International go up and down completely randomly.
Pair Corralation between Kingdee International and Transport International
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 1.52 times more return on investment than Transport International. However, Kingdee International is 1.52 times more volatile than Transport International Holdings. It trades about 0.11 of its potential returns per unit of risk. Transport International Holdings is currently generating about 0.0 per unit of risk. If you would invest 102.00 in Kingdee International Software on November 6, 2024 and sell it today you would earn a total of 23.00 from holding Kingdee International Software or generate 22.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Transport International Holdin
Performance |
| Timeline |
| Kingdee International |
| Transport International |
Kingdee International and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Transport International
The main advantage of trading using opposite Kingdee International and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Transport 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 Transport International will offset losses from the drop in Transport International's long position.| Kingdee International vs. Hisense Home Appliances | Kingdee International vs. Mitsui Chemicals | Kingdee International vs. WESANA HEALTH HOLD | Kingdee International vs. INVITATION HOMES DL |
| Transport International vs. Xenia Hotels Resorts | Transport International vs. Agilent Technologies | Transport International vs. Amkor Technology | Transport International vs. Regal Hotels International |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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