Correlation Between Kuke Music and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both Kuke Music and Software Acquisition 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 Software Acquisition 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 Software Acquisition Group, you can compare the effects of market volatilities on Kuke Music and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuke Music and Software Acquisition.
Diversification Opportunities for Kuke Music and Software Acquisition
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kuke and Software is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kuke Music Holding and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Kuke Music i.e., Kuke Music and Software Acquisition go up and down completely randomly.
Pair Corralation between Kuke Music and Software Acquisition
Given the investment horizon of 90 days Kuke Music Holding is expected to generate 2.42 times more return on investment than Software Acquisition. However, Kuke Music is 2.42 times more volatile than Software Acquisition Group. It trades about 0.03 of its potential returns per unit of risk. Software Acquisition Group is currently generating about 0.01 per unit of risk. If you would invest 67.00 in Kuke Music Holding on August 24, 2024 and sell it today you would lose (31.00) from holding Kuke Music Holding or give up 46.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuke Music Holding vs. Software Acquisition Group
Performance |
| Timeline |
| Kuke Music Holding |
| Software Acquisition |
Kuke Music and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuke Music and Software Acquisition
The main advantage of trading using opposite Kuke Music and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuke Music position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.| Kuke Music vs. Cinemark Holdings | Kuke Music vs. News Corp B | Kuke Music vs. Marcus | Kuke Music vs. Liberty Media |
| Software Acquisition vs. Zedge Inc | Software Acquisition vs. BCE Inc | Software Acquisition vs. Integral Ad Science | Software Acquisition vs. Kaiser Aluminum |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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