Correlation Between Corporate Travel and KUAISHOU TECHNOLOGY

Can any of the company-specific risk be diversified away by investing in both Corporate Travel 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 Corporate Travel and KUAISHOU TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Corporate Travel Management and KUAISHOU TECHNOLOGY CLB, you can compare the effects of market volatilities on Corporate Travel 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 Corporate Travel with a short position of KUAISHOU TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and KUAISHOU TECHNOLOGY.

Diversification Opportunities for Corporate Travel and KUAISHOU TECHNOLOGY

0.14

Correlation Coefficient

Corporate Travel  KUAISHOU TECHNOLOGY

Average diversification

The 3 months correlation between Corporate and KUAISHOU is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and KUAISHOU TECHNOLOGY CLB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KUAISHOU TECHNOLOGY CLB and Corporate Travel 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 Corporate Travel Management 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 CLB has no effect on the direction of Corporate Travel i.e., Corporate Travel and KUAISHOU TECHNOLOGY go up and down completely randomly.

Pair Corralation between Corporate Travel and KUAISHOU TECHNOLOGY

Assuming the 90 days trading horizon Corporate Travel Management is expected to generate 0.91 times more return on investment than KUAISHOU TECHNOLOGY. However, Corporate Travel Management is 1.09 times less risky than KUAISHOU TECHNOLOGY. It trades about 0.01 of its potential returns per unit of risk. KUAISHOU TECHNOLOGY CLB is currently generating about -0.09 per unit of risk. If you would invest  760.00  in Corporate Travel Management on October 10, 2024 and sell it today you would lose (5.00) from holding Corporate Travel Management or give up 0.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Corporate Travel Management  vs.  KUAISHOU TECHNOLOGY CLB

Corporate Travel Man

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Corporate Travel Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Corporate Travel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

KUAISHOU TECHNOLOGY CLB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KUAISHOU TECHNOLOGY CLB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Corporate Travel and KUAISHOU TECHNOLOGY

The main advantage of trading using opposite Corporate Travel and KUAISHOU TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel 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.

The idea behind Corporate Travel Management and KUAISHOU TECHNOLOGY CLB 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.

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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.