Correlation Between Kandi Technologies and Broadleaf

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

By analyzing existing cross correlation between Kandi Technologies Group and Broadleaf Co, you can compare the effects of market volatilities on Kandi Technologies and Broadleaf 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 Kandi Technologies with a short position of Broadleaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Broadleaf.

Diversification Opportunities for Kandi Technologies and Broadleaf

0.52

Correlation Coefficient

Kandi Technologies  Broadleaf

Very weak diversification

The 3 months correlation between Kandi and Broadleaf is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Broadleaf Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadleaf and Kandi Technologies 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 Kandi Technologies Group are associated (or correlated) with Broadleaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadleaf has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Broadleaf go up and down completely randomly.

Pair Corralation between Kandi Technologies and Broadleaf

Given the investment horizon of 90 days Kandi Technologies Group is expected to generate 246.65 times more return on investment than Broadleaf. However, Kandi Technologies is 246.65 times more volatile than Broadleaf Co. It trades about 0.14 of its potential returns per unit of risk. Broadleaf Co is currently generating about 0.13 per unit of risk. If you would invest  93.00  in Kandi Technologies Group on December 26, 2024 and sell it today you would earn a total of  51.00  from holding Kandi Technologies Group or generate 54.84% return on investment over 90 days.

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

Kandi Technologies Group  vs.  Broadleaf Co

Kandi Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kandi Technologies Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating fundamental indicators, Kandi Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Broadleaf

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Broadleaf Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Broadleaf is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kandi Technologies and Broadleaf

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

The idea behind Kandi Technologies Group and Broadleaf Co 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.