Correlation Between Kingdee International and PHARMACOLOG
Can any of the company-specific risk be diversified away by investing in both Kingdee International and PHARMACOLOG 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 PHARMACOLOG 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 PHARMACOLOG I UPPSALA, you can compare the effects of market volatilities on Kingdee International and PHARMACOLOG 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 PHARMACOLOG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and PHARMACOLOG.
Diversification Opportunities for Kingdee International and PHARMACOLOG
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and PHARMACOLOG is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and PHARMACOLOG I UPPSALA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHARMACOLOG I UPPSALA 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 PHARMACOLOG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHARMACOLOG I UPPSALA has no effect on the direction of Kingdee International i.e., Kingdee International and PHARMACOLOG go up and down completely randomly.
Pair Corralation between Kingdee International and PHARMACOLOG
Assuming the 90 days trading horizon Kingdee International is expected to generate 2.74 times less return on investment than PHARMACOLOG. But when comparing it to its historical volatility, Kingdee International Software is 4.5 times less risky than PHARMACOLOG. It trades about 0.42 of its potential returns per unit of risk. PHARMACOLOG I UPPSALA is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 33.00 in PHARMACOLOG I UPPSALA on November 4, 2024 and sell it today you would earn a total of 22.00 from holding PHARMACOLOG I UPPSALA or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kingdee International Software vs. PHARMACOLOG I UPPSALA
Performance |
| Timeline |
| Kingdee International |
| PHARMACOLOG I UPPSALA |
Kingdee International and PHARMACOLOG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and PHARMACOLOG
The main advantage of trading using opposite Kingdee International and PHARMACOLOG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, PHARMACOLOG 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 PHARMACOLOG will offset losses from the drop in PHARMACOLOG's long position.| Kingdee International vs. Mitsubishi Gas Chemical | Kingdee International vs. Eastman Chemical | Kingdee International vs. WisdomTree Investments | Kingdee International vs. Mitsui Chemicals |
| PHARMACOLOG vs. Verizon Communications | PHARMACOLOG vs. Elmos Semiconductor SE | PHARMACOLOG vs. Magnachip Semiconductor | PHARMACOLOG vs. Rocket Internet SE |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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