Correlation Between Ke Holdings and Leju Holdings

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

By analyzing existing cross correlation between Ke Holdings and Leju Holdings Limited, you can compare the effects of market volatilities on Ke Holdings and Leju Holdings 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 Ke Holdings with a short position of Leju Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Leju Holdings.

Diversification Opportunities for Ke Holdings and Leju Holdings

0.1

Correlation Coefficient

Ke Holdings  Leju Holdings

Average diversification

The 3 months correlation between BEKE and Leju is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Leju Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leju Holdings Limited and Ke Holdings 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 Ke Holdings are associated (or correlated) with Leju Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leju Holdings Limited has no effect on the direction of Ke Holdings i.e., Ke Holdings and Leju Holdings go up and down completely randomly.

Pair Corralation between Ke Holdings and Leju Holdings

If you would invest  1,359  in Ke Holdings on September 12, 2024 and sell it today you would earn a total of  692.00  from holding Ke Holdings or generate 50.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Ke Holdings  vs.  Leju Holdings Limited

Ke Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ke Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward-looking signals, Ke Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Leju Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leju Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking indicators, Leju Holdings is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ke Holdings and Leju Holdings

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

The idea behind Ke Holdings and Leju Holdings Limited 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.