Correlation Between Kingdee International and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Kingdee International and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Gruppo Mutuionline.
Diversification Opportunities for Kingdee International and Gruppo Mutuionline
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kingdee and Gruppo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Kingdee International i.e., Kingdee International and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Kingdee International and Gruppo Mutuionline
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.46 times more return on investment than Gruppo Mutuionline. However, Kingdee International is 2.46 times more volatile than Gruppo Mutuionline SpA. It trades about 0.33 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.09 per unit of risk. If you would invest 99.00 in Kingdee International Software on November 8, 2024 and sell it today you would earn a total of 26.00 from holding Kingdee International Software or generate 26.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Kingdee International |
| Gruppo Mutuionline SpA |
Kingdee International and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Gruppo Mutuionline
The main advantage of trading using opposite Kingdee International and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Kingdee International vs. CREDIT AGRICOLE | Kingdee International vs. SALESFORCE INC CDR | Kingdee International vs. REVO INSURANCE SPA | Kingdee International vs. UNICREDIT SPA ADR |
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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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