Correlation Between Panda Dairy and Keeson Technology

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

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

Diversification Opportunities for Panda Dairy and Keeson Technology

0.94

Correlation Coefficient

Panda Dairy  Keeson Technology

Almost no diversification

The 3 months correlation between Panda and Keeson is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Panda Dairy Corp and Keeson Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keeson Technology Corp and Panda Dairy 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 Panda Dairy Corp are associated (or correlated) with Keeson Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keeson Technology Corp has no effect on the direction of Panda Dairy i.e., Panda Dairy and Keeson Technology go up and down completely randomly.

Pair Corralation between Panda Dairy and Keeson Technology

Assuming the 90 days trading horizon Panda Dairy Corp is expected to generate 2.06 times more return on investment than Keeson Technology. However, Panda Dairy is 2.06 times more volatile than Keeson Technology Corp. It trades about 0.28 of its potential returns per unit of risk. Keeson Technology Corp is currently generating about 0.24 per unit of risk. If you would invest  1,531  in Panda Dairy Corp on September 13, 2024 and sell it today you would earn a total of  1,963  from holding Panda Dairy Corp or generate 128.22% return on investment over 90 days.

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

Panda Dairy Corp  vs.  Keeson Technology Corp

Panda Dairy Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Panda Dairy Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Panda Dairy sustained solid returns over the last few months and may actually be approaching a breakup point.

Keeson Technology Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Keeson Technology Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Keeson Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panda Dairy and Keeson Technology

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

The idea behind Panda Dairy Corp and Keeson Technology Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.