Correlation Between SPORTING and Kingdee International
Can any of the company-specific risk be diversified away by investing in both SPORTING and Kingdee International 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 SPORTING and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORTING and Kingdee International Software, you can compare the effects of market volatilities on SPORTING and Kingdee International 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 SPORTING with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORTING and Kingdee International.
Diversification Opportunities for SPORTING and Kingdee International
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPORTING and Kingdee is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SPORTING and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and SPORTING 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 SPORTING are associated (or correlated) with Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of SPORTING i.e., SPORTING and Kingdee International go up and down completely randomly.
Pair Corralation between SPORTING and Kingdee International
Assuming the 90 days trading horizon SPORTING is expected to generate 2.66 times more return on investment than Kingdee International. However, SPORTING is 2.66 times more volatile than Kingdee International Software. It trades about -0.11 of its potential returns per unit of risk. Kingdee International Software is currently generating about -0.35 per unit of risk. If you would invest 108.00 in SPORTING on October 12, 2024 and sell it today you would lose (16.00) from holding SPORTING or give up 14.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORTING vs. Kingdee International Software
Performance |
| Timeline |
| SPORTING |
| Kingdee International |
SPORTING and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORTING and Kingdee International
The main advantage of trading using opposite SPORTING and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORTING position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| SPORTING vs. GameStop Corp | SPORTING vs. CENTURIA OFFICE REIT | SPORTING vs. Tower One Wireless | SPORTING vs. PLAYMATES TOYS |
| Kingdee International vs. CHINA TONTINE WINES | Kingdee International vs. VIVA WINE GROUP | Kingdee International vs. Aegean Airlines SA | Kingdee International vs. Singapore Airlines Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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