Correlation Between Kuaishou Technology and Trivago NV
Can any of the company-specific risk be diversified away by investing in both Kuaishou Technology and Trivago NV 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 Kuaishou Technology and Trivago NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuaishou Technology and Trivago NV, you can compare the effects of market volatilities on Kuaishou Technology and Trivago NV 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 Kuaishou Technology with a short position of Trivago NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuaishou Technology and Trivago NV.
Diversification Opportunities for Kuaishou Technology and Trivago NV
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kuaishou and Trivago is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kuaishou Technology and Trivago NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trivago NV and Kuaishou Technology 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 Kuaishou Technology are associated (or correlated) with Trivago NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trivago NV has no effect on the direction of Kuaishou Technology i.e., Kuaishou Technology and Trivago NV go up and down completely randomly.
Pair Corralation between Kuaishou Technology and Trivago NV
Assuming the 90 days horizon Kuaishou Technology is expected to under-perform the Trivago NV. In addition to that, Kuaishou Technology is 2.36 times more volatile than Trivago NV. It trades about -0.02 of its total potential returns per unit of risk. Trivago NV is currently generating about 0.16 per unit of volatility. If you would invest 165.00 in Trivago NV on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Trivago NV or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuaishou Technology vs. Trivago NV
Performance |
| Timeline |
| Kuaishou Technology |
| Trivago NV |
Kuaishou Technology and Trivago NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuaishou Technology and Trivago NV
The main advantage of trading using opposite Kuaishou Technology and Trivago NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuaishou Technology position performs unexpectedly, Trivago NV 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 Trivago NV will offset losses from the drop in Trivago NV's long position.| Kuaishou Technology vs. Trivago NV | Kuaishou Technology vs. YY Inc Class | Kuaishou Technology vs. DouYu International Holdings | Kuaishou Technology vs. Tencent Music Entertainment |
| Trivago NV vs. Alphabet Inc Class C | Trivago NV vs. Twilio Inc | Trivago NV vs. Snap Inc | Trivago NV vs. Baidu Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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