Correlation Between Lipocine and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both Lipocine and Kandi Technologies 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 Lipocine and Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lipocine and Kandi Technologies Group, you can compare the effects of market volatilities on Lipocine and Kandi Technologies 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 Lipocine with a short position of Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lipocine and Kandi Technologies.
Diversification Opportunities for Lipocine and Kandi Technologies
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lipocine and Kandi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Lipocine and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and Lipocine 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 Lipocine are associated (or correlated) with Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Lipocine i.e., Lipocine and Kandi Technologies go up and down completely randomly.
Pair Corralation between Lipocine and Kandi Technologies
Given the investment horizon of 90 days Lipocine is expected to under-perform the Kandi Technologies. In addition to that, Lipocine is 1.29 times more volatile than Kandi Technologies Group. It trades about -0.13 of its total potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.1 per unit of volatility. If you would invest 144.00 in Kandi Technologies Group on August 30, 2024 and sell it today you would lose (18.00) from holding Kandi Technologies Group or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lipocine vs. Kandi Technologies Group
Performance |
| Timeline |
| Lipocine |
| Kandi Technologies |
Lipocine and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lipocine and Kandi Technologies
The main advantage of trading using opposite Lipocine and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lipocine position performs unexpectedly, Kandi Technologies 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 Kandi Technologies will offset losses from the drop in Kandi Technologies' long position.The idea behind Lipocine and Kandi Technologies Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kandi Technologies vs. Gentex | Kandi Technologies vs. Adient PLC | Kandi Technologies vs. Autoliv | Kandi Technologies vs. Fox Factory Holding |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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