Correlation Between Kandi Technologies and Cementos Pacasmayo

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

By analyzing existing cross correlation between Kandi Technologies Group and Cementos Pacasmayo SAA, you can compare the effects of market volatilities on Kandi Technologies and Cementos Pacasmayo 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 Kandi Technologies with a short position of Cementos Pacasmayo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Cementos Pacasmayo.

Diversification Opportunities for Kandi Technologies and Cementos Pacasmayo

-0.76

Correlation Coefficient

Kandi Technologies  Cementos Pacasmayo

Pay attention - limited upside

The 3 months correlation between Kandi and Cementos is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Cementos Pacasmayo SAA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cementos Pacasmayo SAA and Kandi Technologies 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 Kandi Technologies Group are associated (or correlated) with Cementos Pacasmayo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cementos Pacasmayo SAA has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Cementos Pacasmayo go up and down completely randomly.

Pair Corralation between Kandi Technologies and Cementos Pacasmayo

Given the investment horizon of 90 days Kandi Technologies Group is expected to under-perform the Cementos Pacasmayo. In addition to that, Kandi Technologies is 2.84 times more volatile than Cementos Pacasmayo SAA. It trades about -0.15 of its total potential returns per unit of risk. Cementos Pacasmayo SAA is currently generating about 0.03 per unit of volatility. If you would invest  526.00  in Cementos Pacasmayo SAA on September 26, 2024 and sell it today you would earn a total of  12.00  from holding Cementos Pacasmayo SAA or generate 2.28% return on investment over 90 days.

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

Kandi Technologies Group  vs.  Cementos Pacasmayo SAA

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group 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 fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Cementos Pacasmayo SAA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cementos Pacasmayo SAA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Cementos Pacasmayo is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kandi Technologies and Cementos Pacasmayo

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

The idea behind Kandi Technologies Group and Cementos Pacasmayo SAA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.