Correlation Between Kangping Technology and G Bits

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

By analyzing existing cross correlation between Kangping Technology Co and G bits Network Technology, you can compare the effects of market volatilities on Kangping Technology and G Bits 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 Kangping Technology with a short position of G Bits. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kangping Technology and G Bits.

Diversification Opportunities for Kangping Technology and G Bits

0.3

Correlation Coefficient

Kangping Technology  G Bits

Weak diversification

The 3 months correlation between Kangping and 603444 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kangping Technology Co and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Kangping 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 Kangping Technology Co are associated (or correlated) with G Bits. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Kangping Technology i.e., Kangping Technology and G Bits go up and down completely randomly.

Pair Corralation between Kangping Technology and G Bits

Assuming the 90 days trading horizon Kangping Technology Co is expected to generate 1.02 times more return on investment than G Bits. However, Kangping Technology is 1.02 times more volatile than G bits Network Technology. It trades about 0.03 of its potential returns per unit of risk. G bits Network Technology is currently generating about -0.01 per unit of risk. If you would invest  1,702  in Kangping Technology Co on September 24, 2024 and sell it today you would earn a total of  553.00  from holding Kangping Technology Co or generate 32.49% return on investment over 90 days.

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

Kangping Technology Co  vs.  G bits Network Technology

Kangping Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kangping Technology Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kangping Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

G bits Network

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Kangping Technology and G Bits

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

The idea behind Kangping Technology Co and G bits Network Technology 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.