Correlation Between Kuaishou Technology and Prosus NV
Can any of the company-specific risk be diversified away by investing in both Kuaishou Technology and Prosus 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 Prosus 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 Prosus NV ADR, you can compare the effects of market volatilities on Kuaishou Technology and Prosus 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 Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuaishou Technology and Prosus NV.
Diversification Opportunities for Kuaishou Technology and Prosus NV
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kuaishou and Prosus is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kuaishou Technology and Prosus NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV ADR 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 Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV ADR has no effect on the direction of Kuaishou Technology i.e., Kuaishou Technology and Prosus NV go up and down completely randomly.
Pair Corralation between Kuaishou Technology and Prosus NV
Assuming the 90 days horizon Kuaishou Technology is expected to under-perform the Prosus NV. In addition to that, Kuaishou Technology is 1.72 times more volatile than Prosus NV ADR. It trades about -0.04 of its total potential returns per unit of risk. Prosus NV ADR is currently generating about 0.02 per unit of volatility. If you would invest 735.00 in Prosus NV ADR on November 4, 2024 and sell it today you would earn a total of 32.00 from holding Prosus NV ADR or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.6% |
| Values | Daily Returns |
Kuaishou Technology vs. Prosus NV ADR
Performance |
| Timeline |
| Kuaishou Technology |
| Prosus NV ADR |
Kuaishou Technology and Prosus NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuaishou Technology and Prosus NV
The main advantage of trading using opposite Kuaishou Technology and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuaishou Technology position performs unexpectedly, Prosus 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 Prosus NV will offset losses from the drop in Prosus NV's long position.| Kuaishou Technology vs. Tencent Holdings | Kuaishou Technology vs. Trivago NV | Kuaishou Technology vs. YY Inc Class | Kuaishou Technology vs. DouYu International Holdings |
| Prosus NV vs. Ping An Insurance | Prosus NV vs. Prosus | Prosus NV vs. Meituan ADR | Prosus NV vs. Murata Manufacturing |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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