Correlation Between Prosus NV and Kuaishou Technology
Can any of the company-specific risk be diversified away by investing in both Prosus NV and Kuaishou Technology 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 Prosus NV and Kuaishou Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus NV ADR and Kuaishou Technology, you can compare the effects of market volatilities on Prosus NV and Kuaishou Technology 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 Prosus NV with a short position of Kuaishou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus NV and Kuaishou Technology.
Diversification Opportunities for Prosus NV and Kuaishou Technology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prosus and Kuaishou is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV ADR and Kuaishou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuaishou Technology and Prosus NV 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 Prosus NV ADR are associated (or correlated) with Kuaishou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuaishou Technology has no effect on the direction of Prosus NV i.e., Prosus NV and Kuaishou Technology go up and down completely randomly.
Pair Corralation between Prosus NV and Kuaishou Technology
Assuming the 90 days horizon Prosus NV ADR is expected to generate 0.58 times more return on investment than Kuaishou Technology. However, Prosus NV ADR is 1.72 times less risky than Kuaishou Technology. It trades about 0.02 of its potential returns per unit of risk. Kuaishou Technology is currently generating about -0.04 per unit of risk. 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 |
Prosus NV ADR vs. Kuaishou Technology
Performance |
| Timeline |
| Prosus NV ADR |
| Kuaishou Technology |
Prosus NV and Kuaishou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus NV and Kuaishou Technology
The main advantage of trading using opposite Prosus NV and Kuaishou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV position performs unexpectedly, Kuaishou Technology 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 Kuaishou Technology will offset losses from the drop in Kuaishou Technology's long position.| Prosus NV vs. Ping An Insurance | Prosus NV vs. Prosus | Prosus NV vs. Meituan ADR | Prosus NV vs. Murata Manufacturing |
| Kuaishou Technology vs. Tencent Holdings | Kuaishou Technology vs. Trivago NV | Kuaishou Technology vs. YY Inc Class | Kuaishou Technology vs. DouYu International Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |