Correlation Between Kuaishou Technology and Liberty Tri

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

By analyzing existing cross correlation between Kuaishou Technology and Liberty Tri, you can compare the effects of market volatilities on Kuaishou Technology and Liberty Tri 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 Kuaishou Technology with a short position of Liberty Tri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuaishou Technology and Liberty Tri.

Diversification Opportunities for Kuaishou Technology and Liberty Tri

-0.25

Correlation Coefficient

Kuaishou Technology  Liberty Tri

Very good diversification

The 3 months correlation between Kuaishou and Liberty is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kuaishou Technology and Liberty Tri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Tri and Kuaishou Technology 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 Kuaishou Technology are associated (or correlated) with Liberty Tri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Tri has no effect on the direction of Kuaishou Technology i.e., Kuaishou Technology and Liberty Tri go up and down completely randomly.

Pair Corralation between Kuaishou Technology and Liberty Tri

If you would invest  500.00  in Kuaishou Technology on September 4, 2024 and sell it today you would earn a total of  78.00  from holding Kuaishou Technology or generate 15.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Kuaishou Technology  vs.  Liberty Tri

Kuaishou Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kuaishou Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kuaishou Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Liberty Tri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Tri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Liberty Tri is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kuaishou Technology and Liberty Tri

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

The idea behind Kuaishou Technology and Liberty Tri 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.