Correlation Between ZINC MEDIA and Kingdee International
Can any of the company-specific risk be diversified away by investing in both ZINC MEDIA 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 ZINC MEDIA and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZINC MEDIA GR and Kingdee International Software, you can compare the effects of market volatilities on ZINC MEDIA 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 ZINC MEDIA with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZINC MEDIA and Kingdee International.
Diversification Opportunities for ZINC MEDIA and Kingdee International
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ZINC and Kingdee is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding ZINC MEDIA GR and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and ZINC MEDIA 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 ZINC MEDIA GR 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 ZINC MEDIA i.e., ZINC MEDIA and Kingdee International go up and down completely randomly.
Pair Corralation between ZINC MEDIA and Kingdee International
Assuming the 90 days trading horizon ZINC MEDIA GR is expected to generate 0.91 times more return on investment than Kingdee International. However, ZINC MEDIA GR is 1.1 times less risky than Kingdee International. It trades about 0.3 of its potential returns per unit of risk. Kingdee International Software is currently generating about 0.01 per unit of risk. If you would invest 56.00 in ZINC MEDIA GR on October 26, 2024 and sell it today you would earn a total of 8.00 from holding ZINC MEDIA GR or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
ZINC MEDIA GR vs. Kingdee International Software
Performance |
Timeline |
ZINC MEDIA GR |
Kingdee International |
ZINC MEDIA and Kingdee International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ZINC MEDIA and Kingdee International
The main advantage of trading using opposite ZINC MEDIA and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZINC MEDIA 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.The idea behind ZINC MEDIA GR and Kingdee International Software 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.Kingdee International vs. FUYO GENERAL LEASE | Kingdee International vs. Nucletron Electronic Aktiengesellschaft | Kingdee International vs. WILLIS LEASE FIN | Kingdee International vs. United Rentals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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