Correlation Between Keeson Technology and Shaanxi Energy

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

By analyzing existing cross correlation between Keeson Technology Corp and Shaanxi Energy Investment, you can compare the effects of market volatilities on Keeson Technology and Shaanxi Energy 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 Keeson Technology with a short position of Shaanxi Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keeson Technology and Shaanxi Energy.

Diversification Opportunities for Keeson Technology and Shaanxi Energy

-0.07

Correlation Coefficient

Keeson Technology  Shaanxi Energy

Good diversification

The 3 months correlation between Keeson and Shaanxi is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Keeson Technology Corp and Shaanxi Energy Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaanxi Energy Investment and Keeson 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 Keeson Technology Corp are associated (or correlated) with Shaanxi Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaanxi Energy Investment has no effect on the direction of Keeson Technology i.e., Keeson Technology and Shaanxi Energy go up and down completely randomly.

Pair Corralation between Keeson Technology and Shaanxi Energy

Assuming the 90 days trading horizon Keeson Technology Corp is expected to generate 4.6 times more return on investment than Shaanxi Energy. However, Keeson Technology is 4.6 times more volatile than Shaanxi Energy Investment. It trades about 0.26 of its potential returns per unit of risk. Shaanxi Energy Investment is currently generating about 0.01 per unit of risk. If you would invest  1,011  in Keeson Technology Corp on September 28, 2024 and sell it today you would earn a total of  269.00  from holding Keeson Technology Corp or generate 26.61% return on investment over 90 days.

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

Keeson Technology Corp  vs.  Shaanxi Energy Investment

Keeson Technology Corp

Risk-Adjusted Performance

9 of 100

OK

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

Shaanxi Energy Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shaanxi Energy Investment 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Keeson Technology and Shaanxi Energy

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

The idea behind Keeson Technology Corp and Shaanxi Energy Investment 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.