Correlation Between EEDUCATION ALBERT and Kingdee International

Can any of the company-specific risk be diversified away by investing in both EEDUCATION ALBERT and Kingdee International 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 EEDUCATION ALBERT and Kingdee International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EEDUCATION ALBERT AB and Kingdee International Software, you can compare the effects of market volatilities on EEDUCATION ALBERT and Kingdee International 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 EEDUCATION ALBERT with a short position of Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of EEDUCATION ALBERT and Kingdee International.

Diversification Opportunities for EEDUCATION ALBERT and Kingdee International

0.0

Correlation Coefficient

EEDUCATION ALBERT  Kingdee International

Pay attention - limited upside

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

Pair Corralation between EEDUCATION ALBERT and Kingdee International

If you would invest  110.00  in Kingdee International Software on December 23, 2024 and sell it today you would earn a total of  48.00  from holding Kingdee International Software or generate 43.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

EEDUCATION ALBERT AB  vs.  Kingdee International Software

EEDUCATION ALBERT

Risk-Adjusted Performance

Very Weak

Over the last 90 days EEDUCATION ALBERT AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EEDUCATION ALBERT is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Kingdee International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward indicators, Kingdee International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EEDUCATION ALBERT and Kingdee International

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

The idea behind EEDUCATION ALBERT AB and Kingdee International Software 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.