Correlation Between KUAISHOU TECHNOLOGY and Vivendi SE

Can any of the company-specific risk be diversified away by investing in both KUAISHOU TECHNOLOGY and Vivendi SE 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 Vivendi SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KUAISHOU TECHNOLOGY CLB and Vivendi SE, you can compare the effects of market volatilities on KUAISHOU TECHNOLOGY and Vivendi SE 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 Vivendi SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KUAISHOU TECHNOLOGY and Vivendi SE.

Diversification Opportunities for KUAISHOU TECHNOLOGY and Vivendi SE

0.29

Correlation Coefficient

KUAISHOU TECHNOLOGY  Vivendi SE

Modest diversification

The 3 months correlation between KUAISHOU and Vivendi is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding KUAISHOU TECHNOLOGY CLB and Vivendi SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi SE 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 CLB are associated (or correlated) with Vivendi SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SE has no effect on the direction of KUAISHOU TECHNOLOGY i.e., KUAISHOU TECHNOLOGY and Vivendi SE go up and down completely randomly.

Pair Corralation between KUAISHOU TECHNOLOGY and Vivendi SE

Assuming the 90 days horizon KUAISHOU TECHNOLOGY CLB is expected to generate 0.34 times more return on investment than Vivendi SE. However, KUAISHOU TECHNOLOGY CLB is 2.91 times less risky than Vivendi SE. It trades about -0.04 of its potential returns per unit of risk. Vivendi SE is currently generating about -0.08 per unit of risk. If you would invest  600.00  in KUAISHOU TECHNOLOGY CLB on September 29, 2024 and sell it today you would lose (86.00) from holding KUAISHOU TECHNOLOGY CLB or give up 14.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

KUAISHOU TECHNOLOGY CLB  vs.  Vivendi SE

KUAISHOU TECHNOLOGY CLB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KUAISHOU TECHNOLOGY CLB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Vivendi SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vivendi SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with KUAISHOU TECHNOLOGY and Vivendi SE

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

The idea behind KUAISHOU TECHNOLOGY CLB and Vivendi SE 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 Stocks Directory module to find actively traded stocks across global markets.