Correlation Between ATRESMEDIA and Kingdee International
Can any of the company-specific risk be diversified away by investing in both ATRESMEDIA 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 ATRESMEDIA and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRESMEDIA and Kingdee International Software, you can compare the effects of market volatilities on ATRESMEDIA 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 ATRESMEDIA with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRESMEDIA and Kingdee International.
Diversification Opportunities for ATRESMEDIA and Kingdee International
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATRESMEDIA and Kingdee is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding ATRESMEDIA and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA i.e., ATRESMEDIA and Kingdee International go up and down completely randomly.
Pair Corralation between ATRESMEDIA and Kingdee International
Assuming the 90 days trading horizon ATRESMEDIA is expected to under-perform the Kingdee International. But the stock apears to be less risky and, when comparing its historical volatility, ATRESMEDIA is 3.0 times less risky than Kingdee International. The stock trades about -0.12 of its potential returns per unit of risk. The Kingdee International Software is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 97.00 in Kingdee International Software on November 5, 2024 and sell it today you would earn a total of 28.00 from holding Kingdee International Software or generate 28.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATRESMEDIA vs. Kingdee International Software
Performance |
| Timeline |
| ATRESMEDIA |
| Kingdee International |
ATRESMEDIA and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRESMEDIA and Kingdee International
The main advantage of trading using opposite ATRESMEDIA and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRESMEDIA 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.| ATRESMEDIA vs. Verizon Communications | ATRESMEDIA vs. Casio Computer CoLtd | ATRESMEDIA vs. CRISPR Therapeutics AG | ATRESMEDIA vs. Highlight Communications AG |
| Kingdee International vs. Mitsubishi Gas Chemical | Kingdee International vs. Eastman Chemical | Kingdee International vs. WisdomTree Investments | Kingdee International vs. Mitsui Chemicals |
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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