Correlation Between KSEC Intelligent and Jiangsu Phoenix

Can any of the company-specific risk be diversified away by investing in both KSEC Intelligent and Jiangsu Phoenix 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 KSEC Intelligent and Jiangsu Phoenix into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for KSEC Intelligent and Jiangsu Phoenix

0.06

Correlation Coefficient

KSEC Intelligent  Jiangsu Phoenix

Significant diversification

The 3 months correlation between KSEC and Jiangsu is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding KSEC Intelligent Technology and Jiangsu Phoenix Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Phoenix Publ and KSEC Intelligent 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 KSEC Intelligent Technology are associated (or correlated) with Jiangsu Phoenix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Phoenix Publ has no effect on the direction of KSEC Intelligent i.e., KSEC Intelligent and Jiangsu Phoenix go up and down completely randomly.

Pair Corralation between KSEC Intelligent and Jiangsu Phoenix

Assuming the 90 days trading horizon KSEC Intelligent Technology is expected to under-perform the Jiangsu Phoenix. In addition to that, KSEC Intelligent is 1.05 times more volatile than Jiangsu Phoenix Publishing. It trades about -0.09 of its total potential returns per unit of risk. Jiangsu Phoenix Publishing is currently generating about 0.25 per unit of volatility. If you would invest  1,027  in Jiangsu Phoenix Publishing on September 27, 2024 and sell it today you would earn a total of  105.00  from holding Jiangsu Phoenix Publishing or generate 10.22% return on investment over 90 days.

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

KSEC Intelligent Technology  vs.  Jiangsu Phoenix Publishing

KSEC Intelligent Tec

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KSEC Intelligent Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KSEC Intelligent may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jiangsu Phoenix Publ

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jiangsu Phoenix Publishing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jiangsu Phoenix is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KSEC Intelligent and Jiangsu Phoenix

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

The idea behind KSEC Intelligent Technology and Jiangsu Phoenix Publishing 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.