Correlation Between Kandi Technologies and AYRO
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies and AYRO 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 Kandi Technologies and AYRO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kandi Technologies Group and AYRO Inc, you can compare the effects of market volatilities on Kandi Technologies and AYRO 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 Kandi Technologies with a short position of AYRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and AYRO.
Diversification Opportunities for Kandi Technologies and AYRO
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kandi and AYRO is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and AYRO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AYRO Inc and Kandi Technologies 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 Kandi Technologies Group are associated (or correlated) with AYRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AYRO Inc has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and AYRO go up and down completely randomly.
Pair Corralation between Kandi Technologies and AYRO
Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the AYRO. In addition to that, Kandi Technologies is 1.83 times more volatile than AYRO Inc. It trades about -0.23 of its total potential returns per unit of risk. AYRO Inc is currently generating about -0.08 per unit of volatility. If you would invest 84.00 in AYRO Inc on August 29, 2024 and sell it today you would lose (8.00) from holding AYRO Inc or give up 9.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandi Technologies Group vs. AYRO Inc
Performance |
| Timeline |
| Kandi Technologies |
| AYRO Inc |
Kandi Technologies and AYRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandi Technologies and AYRO
The main advantage of trading using opposite Kandi Technologies and AYRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies position performs unexpectedly, AYRO 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 AYRO will offset losses from the drop in AYRO's long position.| Kandi Technologies vs. Gentex | Kandi Technologies vs. Adient PLC | Kandi Technologies vs. Autoliv | Kandi Technologies vs. Fox Factory Holding |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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