Correlation Between Kandi Technologies and WEBTOON Entertainment

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

Diversification Opportunities for Kandi Technologies and WEBTOON Entertainment

-0.83

Correlation Coefficient

Kandi Technologies  WEBTOON Entertainment

Pay attention - limited upside

The 3 months correlation between Kandi and WEBTOON is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and WEBTOON Entertainment Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBTOON Entertainment 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 WEBTOON Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBTOON Entertainment has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and WEBTOON Entertainment go up and down completely randomly.

Pair Corralation between Kandi Technologies and WEBTOON Entertainment

Given the investment horizon of 90 days Kandi Technologies Group is expected to generate 1.69 times more return on investment than WEBTOON Entertainment. However, Kandi Technologies is 1.69 times more volatile than WEBTOON Entertainment Common. It trades about 0.13 of its potential returns per unit of risk. WEBTOON Entertainment Common is currently generating about -0.22 per unit of risk. If you would invest  95.00  in Kandi Technologies Group on December 28, 2024 and sell it today you would earn a total of  43.00  from holding Kandi Technologies Group or generate 45.26% return on investment over 90 days.

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

Kandi Technologies Group  vs.  WEBTOON Entertainment Common

Kandi Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kandi Technologies Group are ranked lower than 10 (%) 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.

WEBTOON Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days WEBTOON Entertainment Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kandi Technologies and WEBTOON Entertainment

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

The idea behind Kandi Technologies Group and WEBTOON Entertainment Common 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.