Correlation Between Kingdee International and Sino Land

Can any of the company-specific risk be diversified away by investing in both Kingdee International and Sino Land 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 Sino Land 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 Sino Land, you can compare the effects of market volatilities on Kingdee International and Sino Land 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 Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Sino Land.

Diversification Opportunities for Kingdee International and Sino Land

0.11

Correlation Coefficient

Kingdee International  Sino Land

Average diversification

The 3 months correlation between Kingdee and Sino is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Sino Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land 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 Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of Kingdee International i.e., Kingdee International and Sino Land go up and down completely randomly.

Pair Corralation between Kingdee International and Sino Land

Assuming the 90 days trading horizon Kingdee International is expected to generate 6.5 times less return on investment than Sino Land. But when comparing it to its historical volatility, Kingdee International Software is 1.03 times less risky than Sino Land. It trades about 0.01 of its potential returns per unit of risk. Sino Land is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Sino Land on October 5, 2024 and sell it today you would earn a total of  49.00  from holding Sino Land or generate 104.26% return on investment over 90 days.

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

Kingdee International Software  vs.  Sino Land

Kingdee International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingdee International Software 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 forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sino Land

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Sino Land has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Sino Land reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingdee International and Sino Land

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

The idea behind Kingdee International Software and Sino Land 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.