Correlation Between Kko International and Guandao Puer

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

By analyzing existing cross correlation between Kko International SA and Guandao Puer Investment, you can compare the effects of market volatilities on Kko International and Guandao Puer 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 Kko International with a short position of Guandao Puer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kko International and Guandao Puer.

Diversification Opportunities for Kko International and Guandao Puer

0.0

Correlation Coefficient

Kko International  Guandao Puer

Pay attention - limited upside

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

Pair Corralation between Kko International and Guandao Puer

If you would invest  11.00  in Kko International SA on September 23, 2024 and sell it today you would earn a total of  6.00  from holding Kko International SA or generate 54.55% return on investment over 90 days.

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

Kko International SA  vs.  Guandao Puer Investment

Kko International

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kko International SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kko International reported solid returns over the last few months and may actually be approaching a breakup point.

Guandao Puer Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guandao Puer Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Guandao Puer is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kko International and Guandao Puer

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

The idea behind Kko International SA and Guandao Puer 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.