Correlation Between Kingdee International and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Acadia Realty 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 Acadia Realty 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 Acadia Realty Trust, you can compare the effects of market volatilities on Kingdee International and Acadia Realty 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 Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Acadia Realty.
Diversification Opportunities for Kingdee International and Acadia Realty
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kingdee and Acadia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust 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 Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Kingdee International i.e., Kingdee International and Acadia Realty go up and down completely randomly.
Pair Corralation between Kingdee International and Acadia Realty
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Acadia Realty. In addition to that, Kingdee International is 1.27 times more volatile than Acadia Realty Trust. It trades about -0.47 of its total potential returns per unit of risk. Acadia Realty Trust is currently generating about -0.25 per unit of volatility. If you would invest 2,361 in Acadia Realty Trust on October 12, 2024 and sell it today you would lose (181.00) from holding Acadia Realty Trust or give up 7.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Kingdee International Software vs. Acadia Realty Trust
Performance |
| Timeline |
| Kingdee International |
| Acadia Realty Trust |
Kingdee International and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Acadia Realty
The main advantage of trading using opposite Kingdee International and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty's 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 |
| Acadia Realty vs. Easy Software AG | Acadia Realty vs. Kingdee International Software | Acadia Realty vs. Shenandoah Telecommunications | Acadia Realty vs. Ribbon Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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