Correlation Between Kuke Music and Lixiang Education
Can any of the company-specific risk be diversified away by investing in both Kuke Music and Lixiang Education 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 Kuke Music and Lixiang Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuke Music Holding and Lixiang Education Holding, you can compare the effects of market volatilities on Kuke Music and Lixiang Education 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 Kuke Music with a short position of Lixiang Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Lixiang Education.
Diversification Opportunities for Kuke Music and Lixiang Education
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kuke and Lixiang is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Lixiang Education Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixiang Education Holding and Kuke Music 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 Kuke Music Holding are associated (or correlated) with Lixiang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixiang Education Holding has no effect on the direction of Kuke Music i.e., Kuke Music and Lixiang Education go up and down completely randomly.
Pair Corralation between Kuke Music and Lixiang Education
Given the investment horizon of 90 days Kuke Music Holding is expected to under-perform the Lixiang Education. In addition to that, Kuke Music is 1.31 times more volatile than Lixiang Education Holding. It trades about -0.08 of its total potential returns per unit of risk. Lixiang Education Holding is currently generating about 0.04 per unit of volatility. If you would invest 243.00 in Lixiang Education Holding on August 31, 2024 and sell it today you would lose (5.00) from holding Lixiang Education Holding or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuke Music Holding vs. Lixiang Education Holding
Performance |
| Timeline |
| Kuke Music Holding |
| Lixiang Education Holding |
Kuke Music and Lixiang Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuke Music and Lixiang Education
The main advantage of trading using opposite Kuke Music and Lixiang Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuke Music position performs unexpectedly, Lixiang Education 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 Lixiang Education will offset losses from the drop in Lixiang Education's long position.| Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
| Lixiang Education vs. China Liberal Education | Lixiang Education vs. Four Seasons Education | Lixiang Education vs. Jianzhi Education Technology | Lixiang Education vs. Elite Education Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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