Correlation Between Kingdee International and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners, you can compare the effects of market volatilities on Kingdee International and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Virtus Investment.
Diversification Opportunities for Kingdee International and Virtus Investment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingdee and Virtus is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Kingdee International i.e., Kingdee International and Virtus Investment go up and down completely randomly.
Pair Corralation between Kingdee International and Virtus Investment
Assuming the 90 days trading horizon Kingdee International Software is expected to generate 1.35 times more return on investment than Virtus Investment. However, Kingdee International is 1.35 times more volatile than Virtus Investment Partners. It trades about -0.11 of its potential returns per unit of risk. Virtus Investment Partners is currently generating about -0.31 per unit of risk. If you would invest 110.00 in Kingdee International Software on October 19, 2024 and sell it today you would lose (6.00) from holding Kingdee International Software or give up 5.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Virtus Investment Partners
Performance |
| Timeline |
| Kingdee International |
| Virtus Investment |
Kingdee International and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Virtus Investment
The main advantage of trading using opposite Kingdee International and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| Kingdee International vs. SIEM OFFSHORE NEW | Kingdee International vs. NURAN WIRELESS INC | Kingdee International vs. PLAYSTUDIOS A DL 0001 | Kingdee International vs. PLAY2CHILL SA ZY |
| Virtus Investment vs. GRUPO CARSO A1 | Virtus Investment vs. THAI BEVERAGE | Virtus Investment vs. CN MODERN DAIRY | Virtus Investment vs. MOLSON RS BEVERAGE |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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