Correlation Between Kingdee International and US Foods
Can any of the company-specific risk be diversified away by investing in both Kingdee International and US Foods 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 US Foods 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 US Foods Holding, you can compare the effects of market volatilities on Kingdee International and US Foods 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 US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and US Foods.
Diversification Opportunities for Kingdee International and US Foods
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kingdee and UFH is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding 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 US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of Kingdee International i.e., Kingdee International and US Foods go up and down completely randomly.
Pair Corralation between Kingdee International and US Foods
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the US Foods. In addition to that, Kingdee International is 1.58 times more volatile than US Foods Holding. It trades about -0.47 of its total potential returns per unit of risk. US Foods Holding is currently generating about -0.03 per unit of volatility. If you would invest 6,650 in US Foods Holding on October 12, 2024 and sell it today you would lose (50.00) from holding US Foods Holding or give up 0.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. US Foods Holding
Performance |
| Timeline |
| Kingdee International |
| US Foods Holding |
Kingdee International and US Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and US Foods
The main advantage of trading using opposite Kingdee International and US Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, US Foods 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 US Foods will offset losses from the drop in US Foods' long position.| Kingdee International vs. Apollo Investment Corp | Kingdee International vs. CITY OFFICE REIT | Kingdee International vs. HK Electric Investments | Kingdee International vs. NURAN WIRELESS INC |
| US Foods vs. Kingdee International Software | US Foods vs. China Datang | US Foods vs. GLG LIFE TECH | US Foods vs. Linedata Services SA |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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