Correlation Between Kingdee International and TRADELINK ELECTRON
Can any of the company-specific risk be diversified away by investing in both Kingdee International and TRADELINK ELECTRON 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 TRADELINK ELECTRON 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 TRADELINK ELECTRON, you can compare the effects of market volatilities on Kingdee International and TRADELINK ELECTRON 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 TRADELINK ELECTRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and TRADELINK ELECTRON.
Diversification Opportunities for Kingdee International and TRADELINK ELECTRON
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kingdee and TRADELINK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and TRADELINK ELECTRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADELINK ELECTRON 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 TRADELINK ELECTRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADELINK ELECTRON has no effect on the direction of Kingdee International i.e., Kingdee International and TRADELINK ELECTRON go up and down completely randomly.
Pair Corralation between Kingdee International and TRADELINK ELECTRON
Assuming the 90 days trading horizon Kingdee International is expected to generate 3.46 times less return on investment than TRADELINK ELECTRON. But when comparing it to its historical volatility, Kingdee International Software is 2.19 times less risky than TRADELINK ELECTRON. It trades about 0.05 of its potential returns per unit of risk. TRADELINK ELECTRON is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.24 in TRADELINK ELECTRON on November 3, 2024 and sell it today you would earn a total of 7.76 from holding TRADELINK ELECTRON or generate 239.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. TRADELINK ELECTRON
Performance |
| Timeline |
| Kingdee International |
| TRADELINK ELECTRON |
Kingdee International and TRADELINK ELECTRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and TRADELINK ELECTRON
The main advantage of trading using opposite Kingdee International and TRADELINK ELECTRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, TRADELINK ELECTRON 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 TRADELINK ELECTRON will offset losses from the drop in TRADELINK ELECTRON's long position.| Kingdee International vs. AIR LIQUIDE ADR | Kingdee International vs. RYANAIR HLDGS ADR | Kingdee International vs. SOLSTAD OFFSHORE NK | Kingdee International vs. SOGECLAIR SA INH |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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