Correlation Between Kandi Technologies and Cumberland Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals, you can compare the effects of market volatilities on Kandi Technologies and Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Cumberland Pharmaceuticals.
Diversification Opportunities for Kandi Technologies and Cumberland Pharmaceuticals
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kandi and Cumberland is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Cumberland Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cumberland Pharmaceuticals has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Cumberland Pharmaceuticals go up and down completely randomly.
Pair Corralation between Kandi Technologies and Cumberland Pharmaceuticals
Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Cumberland Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Kandi Technologies Group is 1.17 times less risky than Cumberland Pharmaceuticals. The stock trades about -0.1 of its potential returns per unit of risk. The Cumberland Pharmaceuticals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 124.00 in Cumberland Pharmaceuticals on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Cumberland Pharmaceuticals or generate 10.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandi Technologies Group vs. Cumberland Pharmaceuticals
Performance |
| Timeline |
| Kandi Technologies |
| Cumberland Pharmaceuticals |
Kandi Technologies and Cumberland Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandi Technologies and Cumberland Pharmaceuticals
The main advantage of trading using opposite Kandi Technologies and Cumberland Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies position performs unexpectedly, Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals will offset losses from the drop in Cumberland Pharmaceuticals' long position.| Kandi Technologies vs. Gentex | Kandi Technologies vs. Adient PLC | Kandi Technologies vs. Autoliv | Kandi Technologies vs. Fox Factory Holding |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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