Correlation Between Kunyue Development and Materials Analysis

Can any of the company-specific risk be diversified away by investing in both Kunyue Development and Materials Analysis 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 Kunyue Development and Materials Analysis into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Kunyue Development and Materials Analysis

-0.67

Correlation Coefficient

Kunyue Development  Materials Analysis

Excellent diversification

The 3 months correlation between Kunyue and Materials is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kunyue Development Co and Materials Analysis Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materials Analysis and Kunyue Development 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 Kunyue Development Co are associated (or correlated) with Materials Analysis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materials Analysis has no effect on the direction of Kunyue Development i.e., Kunyue Development and Materials Analysis go up and down completely randomly.

Pair Corralation between Kunyue Development and Materials Analysis

Assuming the 90 days trading horizon Kunyue Development Co is expected to generate 0.82 times more return on investment than Materials Analysis. However, Kunyue Development Co is 1.22 times less risky than Materials Analysis. It trades about -0.03 of its potential returns per unit of risk. Materials Analysis Technology is currently generating about -0.1 per unit of risk. If you would invest  4,090  in Kunyue Development Co on October 22, 2024 and sell it today you would lose (40.00) from holding Kunyue Development Co or give up 0.98% of portfolio value over 90 days.

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

Kunyue Development Co  vs.  Materials Analysis Technology

Kunyue Development

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kunyue Development Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kunyue Development may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Materials Analysis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Materials Analysis Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Kunyue Development and Materials Analysis

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

The idea behind Kunyue Development Co and Materials Analysis Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.