Correlation Between Dongxing Sec and Kingnet Network

Can any of the company-specific risk be diversified away by investing in both Dongxing Sec and Kingnet Network 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 Dongxing Sec and Kingnet Network into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dongxing Sec Co and Kingnet Network Co, you can compare the effects of market volatilities on Dongxing Sec and Kingnet Network 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 Dongxing Sec with a short position of Kingnet Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongxing Sec and Kingnet Network.

Diversification Opportunities for Dongxing Sec and Kingnet Network

0.0

Correlation Coefficient

Dongxing Sec  Kingnet Network

Pay attention - limited upside

The 3 months correlation between Dongxing and Kingnet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dongxing Sec Co and Kingnet Network Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingnet Network and Dongxing Sec 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 Dongxing Sec Co are associated (or correlated) with Kingnet Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingnet Network has no effect on the direction of Dongxing Sec i.e., Dongxing Sec and Kingnet Network go up and down completely randomly.

Pair Corralation between Dongxing Sec and Kingnet Network

If you would invest  1,361  in Kingnet Network Co on December 31, 2024 and sell it today you would earn a total of  271.00  from holding Kingnet Network Co or generate 19.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Dongxing Sec Co  vs.  Kingnet Network Co

Dongxing Sec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dongxing Sec Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dongxing Sec is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kingnet Network

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingnet Network Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kingnet Network sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dongxing Sec and Kingnet Network

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

The idea behind Dongxing Sec Co and Kingnet Network Co 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.