Correlation Between AUSTEVOLL SEAFOOD and Kingdee International

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

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

Diversification Opportunities for AUSTEVOLL SEAFOOD and Kingdee International

0.38

Correlation Coefficient

AUSTEVOLL SEAFOOD  Kingdee International

Weak diversification

The 3 months correlation between AUSTEVOLL and Kingdee is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International and AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD are associated (or correlated) with Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and Kingdee International go up and down completely randomly.

Pair Corralation between AUSTEVOLL SEAFOOD and Kingdee International

Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to generate 1.84 times more return on investment than Kingdee International. However, AUSTEVOLL SEAFOOD is 1.84 times more volatile than Kingdee International Software. It trades about 0.08 of its potential returns per unit of risk. Kingdee International Software is currently generating about 0.01 per unit of risk. If you would invest  261.00  in AUSTEVOLL SEAFOOD on October 3, 2024 and sell it today you would earn a total of  577.00  from holding AUSTEVOLL SEAFOOD or generate 221.07% return on investment over 90 days.

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

AUSTEVOLL SEAFOOD  vs.  Kingdee International Software

AUSTEVOLL SEAFOOD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AUSTEVOLL SEAFOOD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AUSTEVOLL SEAFOOD is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 nearly stable forward indicators, Kingdee International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with AUSTEVOLL SEAFOOD and Kingdee International

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

The idea behind AUSTEVOLL SEAFOOD and Kingdee International Software 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.