Correlation Between Kingdee International and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Booking Holdings 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 Booking Holdings 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 Booking Holdings, you can compare the effects of market volatilities on Kingdee International and Booking Holdings 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 Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Booking Holdings.
Diversification Opportunities for Kingdee International and Booking Holdings
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and Booking is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking Holdings 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 Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Kingdee International i.e., Kingdee International and Booking Holdings go up and down completely randomly.
Pair Corralation between Kingdee International and Booking Holdings
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.97 times more return on investment than Booking Holdings. However, Kingdee International is 2.97 times more volatile than Booking Holdings. It trades about 0.11 of its potential returns per unit of risk. Booking Holdings is currently generating about 0.14 per unit of risk. If you would invest 76.00 in Kingdee International Software on October 24, 2024 and sell it today you would earn a total of 33.00 from holding Kingdee International Software or generate 43.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.78% |
| Values | Daily Returns |
Kingdee International Software vs. Booking Holdings
Performance |
| Timeline |
| Kingdee International |
| Booking Holdings |
Kingdee International and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Booking Holdings
The main advantage of trading using opposite Kingdee International and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Booking Holdings 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| Kingdee International vs. MOVIE GAMES SA | Kingdee International vs. CONTAGIOUS GAMING INC | Kingdee International vs. DETALION GAMES SA | Kingdee International vs. Firan Technology Group |
| Booking Holdings vs. American Eagle Outfitters | Booking Holdings vs. SMA Solar Technology | Booking Holdings vs. Kingdee International Software | Booking Holdings vs. DXC Technology Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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