Correlation Between Kingdee International and MakeMyTrip
Can any of the company-specific risk be diversified away by investing in both Kingdee International and MakeMyTrip 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 MakeMyTrip 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 MakeMyTrip Limited, you can compare the effects of market volatilities on Kingdee International and MakeMyTrip 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 MakeMyTrip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and MakeMyTrip.
Diversification Opportunities for Kingdee International and MakeMyTrip
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kingdee and MakeMyTrip is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and MakeMyTrip Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MakeMyTrip Limited 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 MakeMyTrip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MakeMyTrip Limited has no effect on the direction of Kingdee International i.e., Kingdee International and MakeMyTrip go up and down completely randomly.
Pair Corralation between Kingdee International and MakeMyTrip
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 1.21 times more return on investment than MakeMyTrip. However, Kingdee International is 1.21 times more volatile than MakeMyTrip Limited. It trades about 0.16 of its potential returns per unit of risk. MakeMyTrip Limited is currently generating about 0.01 per unit of risk. If you would invest 104.00 in Kingdee International Software on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Kingdee International Software or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Kingdee International Software vs. MakeMyTrip Limited
Performance |
| Timeline |
| Kingdee International |
| MakeMyTrip Limited |
Kingdee International and MakeMyTrip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and MakeMyTrip
The main advantage of trading using opposite Kingdee International and MakeMyTrip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, MakeMyTrip 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 MakeMyTrip will offset losses from the drop in MakeMyTrip's long position.| Kingdee International vs. Intuit Inc | Kingdee International vs. Palo Alto Networks | Kingdee International vs. Synopsys | Kingdee International vs. Cadence Design Systems |
| MakeMyTrip vs. SALESFORCE INC CDR | MakeMyTrip vs. CarsalesCom | MakeMyTrip vs. Gruppo Mutuionline SpA | MakeMyTrip vs. Direct Line Insurance |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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