Correlation Between Kingdee International and QUEEN S

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

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

Diversification Opportunities for Kingdee International and QUEEN S

-0.53

Correlation Coefficient

Kingdee International  QUEEN S

Excellent diversification

The 3 months correlation between Kingdee and QUEEN is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and QUEEN S ROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QUEEN S ROAD and Kingdee 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 Kingdee International Software are associated (or correlated) with QUEEN S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QUEEN S ROAD has no effect on the direction of Kingdee International i.e., Kingdee International and QUEEN S go up and down completely randomly.

Pair Corralation between Kingdee International and QUEEN S

Assuming the 90 days trading horizon Kingdee International Software is expected to generate 2.1 times more return on investment than QUEEN S. However, Kingdee International is 2.1 times more volatile than QUEEN S ROAD. It trades about 0.2 of its potential returns per unit of risk. QUEEN S ROAD is currently generating about -0.14 per unit of risk. If you would invest  110.00  in Kingdee International Software on December 20, 2024 and sell it today you would earn a total of  71.00  from holding Kingdee International Software or generate 64.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.67%
Values	Daily Returns

Kingdee International Software  vs.  QUEEN S ROAD

Kingdee International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Kingdee International reported solid returns over the last few months and may actually be approaching a breakup point.

QUEEN S ROAD

Risk-Adjusted Performance

Very Weak

Over the last 90 days QUEEN S ROAD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kingdee International and QUEEN S

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

The idea behind Kingdee International Software and QUEEN S ROAD 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.