Correlation Between Kingdee International and Wizz Air
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Wizz Air 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 Wizz Air 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 Wizz Air Holdings, you can compare the effects of market volatilities on Kingdee International and Wizz Air 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 Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Wizz Air.
Diversification Opportunities for Kingdee International and Wizz Air
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kingdee and Wizz is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of Kingdee International i.e., Kingdee International and Wizz Air go up and down completely randomly.
Pair Corralation between Kingdee International and Wizz Air
Assuming the 90 days horizon Kingdee International Software is expected to generate 1.1 times more return on investment than Wizz Air. However, Kingdee International is 1.1 times more volatile than Wizz Air Holdings. It trades about 0.09 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about 0.01 per unit of risk. If you would invest 78.00 in Kingdee International Software on November 1, 2024 and sell it today you would earn a total of 32.00 from holding Kingdee International Software or generate 41.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 96.47% |
Values | Daily Returns |
Kingdee International Software vs. Wizz Air Holdings
Performance |
Timeline |
Kingdee International |
Wizz Air Holdings |
Kingdee International and Wizz Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kingdee International and Wizz Air
The main advantage of trading using opposite Kingdee International and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air's long position.Kingdee International vs. Inflection Point Acquisition | Kingdee International vs. WK Kellogg Co | Kingdee International vs. Ingredion Incorporated | Kingdee International vs. Aldel Financial II |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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