Correlation Between Kingdee International and Sun Life
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on Kingdee International and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Sun Life.
Diversification Opportunities for Kingdee International and Sun Life
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kingdee and Sun is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Kingdee International i.e., Kingdee International and Sun Life go up and down completely randomly.
Pair Corralation between Kingdee International and Sun Life
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.29 times more return on investment than Sun Life. However, Kingdee International is 2.29 times more volatile than Sun Life Financial. It trades about 0.42 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.01 per unit of risk. If you would invest 98.00 in Kingdee International Software on November 4, 2024 and sell it today you would earn a total of 27.00 from holding Kingdee International Software or generate 27.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kingdee International Software vs. Sun Life Financial
Performance |
| Timeline |
| Kingdee International |
| Sun Life Financial |
Kingdee International and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Sun Life
The main advantage of trading using opposite Kingdee International and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Kingdee International vs. Mitsubishi Gas Chemical | Kingdee International vs. Eastman Chemical | Kingdee International vs. WisdomTree Investments | Kingdee International vs. Mitsui Chemicals |
| Sun Life vs. Cardinal Health | Sun Life vs. OPKO HEALTH | Sun Life vs. US Physical Therapy | Sun Life vs. Wenzhou Kangning Hospital |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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