Correlation Between Kingsoft Cloud and MCloud Technologies

Can any of the company-specific risk be diversified away by investing in both Kingsoft Cloud and MCloud Technologies 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 Kingsoft Cloud and MCloud Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingsoft Cloud Holdings and MCloud Technologies Corp, you can compare the effects of market volatilities on Kingsoft Cloud and MCloud Technologies 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 Kingsoft Cloud with a short position of MCloud Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsoft Cloud and MCloud Technologies.

Diversification Opportunities for Kingsoft Cloud and MCloud Technologies

0.0

Correlation Coefficient

Kingsoft Cloud  MCloud Technologies

Pay attention - limited upside

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

Pair Corralation between Kingsoft Cloud and MCloud Technologies

If you would invest  669.00  in Kingsoft Cloud Holdings on November 29, 2024 and sell it today you would earn a total of  1,211  from holding Kingsoft Cloud Holdings or generate 181.02% return on investment over 90 days.

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

Kingsoft Cloud Holdings  vs.  MCloud Technologies Corp

Kingsoft Cloud Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsoft Cloud Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Kingsoft Cloud exhibited solid returns over the last few months and may actually be approaching a breakup point.

MCloud Technologies Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days MCloud Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, MCloud Technologies is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kingsoft Cloud and MCloud Technologies

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

The idea behind Kingsoft Cloud Holdings and MCloud Technologies Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.