Correlation Between SFL and Kandi Technologies
Can any of the company-specific risk be diversified away by investing in both SFL 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 SFL and Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and Kandi Technologies Group, you can compare the effects of market volatilities on SFL 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 SFL with a short position of Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Kandi Technologies.
Diversification Opportunities for SFL and Kandi Technologies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SFL and Kandi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and SFL 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 SFL Corporation 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 SFL i.e., SFL and Kandi Technologies go up and down completely randomly.
Pair Corralation between SFL and Kandi Technologies
Considering the 90-day investment horizon SFL Corporation is expected to generate 0.52 times more return on investment than Kandi Technologies. However, SFL Corporation is 1.93 times less risky than Kandi Technologies. It trades about 0.04 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.03 per unit of risk. If you would invest 799.00 in SFL Corporation on September 2, 2024 and sell it today you would earn a total of 253.00 from holding SFL Corporation or generate 31.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFL Corp. vs. Kandi Technologies Group
Performance |
| Timeline |
| SFL Corporation |
| Kandi Technologies |
SFL and Kandi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and Kandi Technologies
The main advantage of trading using opposite SFL and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL 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 SFL Corporation 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. Hyliion Holdings Corp | Kandi Technologies vs. Foresight Autonomous Holdings | Kandi Technologies vs. Aeva Technologies | Kandi Technologies vs. Aeye Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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