Correlation Between Kangyue Technology and Semiconductor Manufacturing

Can any of the company-specific risk be diversified away by investing in both Kangyue Technology and Semiconductor Manufacturing 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 Kangyue Technology and Semiconductor Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kangyue Technology Co and Semiconductor Manufacturing Electronics, you can compare the effects of market volatilities on Kangyue Technology and Semiconductor Manufacturing 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 Kangyue Technology with a short position of Semiconductor Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangyue Technology and Semiconductor Manufacturing.

Diversification Opportunities for Kangyue Technology and Semiconductor Manufacturing

0.91

Correlation Coefficient

Kangyue Technology  Semiconductor Manufacturing

Almost no diversification

The 3 months correlation between Kangyue and Semiconductor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Kangyue Technology Co and Semiconductor Manufacturing El in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Manufacturing and Kangyue Technology 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 Kangyue Technology Co are associated (or correlated) with Semiconductor Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Manufacturing has no effect on the direction of Kangyue Technology i.e., Kangyue Technology and Semiconductor Manufacturing go up and down completely randomly.

Pair Corralation between Kangyue Technology and Semiconductor Manufacturing

Assuming the 90 days trading horizon Kangyue Technology Co is expected to under-perform the Semiconductor Manufacturing. In addition to that, Kangyue Technology is 2.42 times more volatile than Semiconductor Manufacturing Electronics. It trades about -0.05 of its total potential returns per unit of risk. Semiconductor Manufacturing Electronics is currently generating about -0.11 per unit of volatility. If you would invest  586.00  in Semiconductor Manufacturing Electronics on December 4, 2024 and sell it today you would lose (70.00) from holding Semiconductor Manufacturing Electronics or give up 11.95% of portfolio value over 90 days.

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

Kangyue Technology Co  vs.  Semiconductor Manufacturing El

Kangyue Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kangyue Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Semiconductor Manufacturing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Semiconductor Manufacturing Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kangyue Technology and Semiconductor Manufacturing

The main advantage of trading using opposite Kangyue Technology and Semiconductor Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kangyue Technology position performs unexpectedly, Semiconductor Manufacturing 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 Semiconductor Manufacturing will offset losses from the drop in Semiconductor Manufacturing's long position.

The idea behind Kangyue Technology Co and Semiconductor Manufacturing Electronics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.