Correlation Between Gansu Jiu and KSEC Intelligent

Can any of the company-specific risk be diversified away by investing in both Gansu Jiu and KSEC Intelligent 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 Gansu Jiu and KSEC Intelligent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gansu Jiu Steel and KSEC Intelligent Technology, you can compare the effects of market volatilities on Gansu Jiu and KSEC Intelligent 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 Gansu Jiu with a short position of KSEC Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Jiu and KSEC Intelligent.

Diversification Opportunities for Gansu Jiu and KSEC Intelligent

0.55

Correlation Coefficient

Gansu Jiu  KSEC Intelligent

Very weak diversification

The 3 months correlation between Gansu and KSEC is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Jiu Steel and KSEC Intelligent Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSEC Intelligent Tec and Gansu Jiu 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 Gansu Jiu Steel are associated (or correlated) with KSEC Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSEC Intelligent Tec has no effect on the direction of Gansu Jiu i.e., Gansu Jiu and KSEC Intelligent go up and down completely randomly.

Pair Corralation between Gansu Jiu and KSEC Intelligent

Assuming the 90 days trading horizon Gansu Jiu Steel is expected to under-perform the KSEC Intelligent. But the stock apears to be less risky and, when comparing its historical volatility, Gansu Jiu Steel is 1.97 times less risky than KSEC Intelligent. The stock trades about -0.01 of its potential returns per unit of risk. The KSEC Intelligent Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,109  in KSEC Intelligent Technology on October 22, 2024 and sell it today you would lose (361.00) from holding KSEC Intelligent Technology or give up 17.12% of portfolio value over 90 days.

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

Gansu Jiu Steel  vs.  KSEC Intelligent Technology

Gansu Jiu Steel

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gansu Jiu Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Gansu Jiu may actually be approaching a critical reversion point that can send shares even higher in February 2025.

KSEC Intelligent Tec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KSEC Intelligent Technology 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Gansu Jiu and KSEC Intelligent

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

The idea behind Gansu Jiu Steel and KSEC Intelligent 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .