Correlation Between Kandi Technologies and NuRAN Wireless

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Can any of the company-specific risk be diversified away by investing in both Kandi Technologies and NuRAN Wireless 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 NuRAN Wireless 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 NuRAN Wireless, you can compare the effects of market volatilities on Kandi Technologies and NuRAN Wireless 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 NuRAN Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and NuRAN Wireless.

Diversification Opportunities for Kandi Technologies and NuRAN Wireless

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Kandi and NuRAN is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and NuRAN Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuRAN Wireless 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 NuRAN Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuRAN Wireless has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and NuRAN Wireless go up and down completely randomly.

Pair Corralation between Kandi Technologies and NuRAN Wireless

Given the investment horizon of 90 days Kandi Technologies Group is expected to generate 0.47 times more return on investment than NuRAN Wireless. However, Kandi Technologies Group is 2.11 times less risky than NuRAN Wireless. It trades about -0.05 of its potential returns per unit of risk. NuRAN Wireless is currently generating about -0.03 per unit of risk. If you would invest  233.00  in Kandi Technologies Group on September 23, 2024 and sell it today you would lose (143.00) from holding Kandi Technologies Group or give up 61.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

Kandi Technologies Group  vs.  NuRAN Wireless

 Performance 
       Timeline  
Kandi Technologies 

Risk-Adjusted Performance

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Strong
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 unfluctuating 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.
NuRAN Wireless 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NuRAN Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent 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.

Kandi Technologies and NuRAN Wireless Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kandi Technologies and NuRAN Wireless

The main advantage of trading using opposite Kandi Technologies and NuRAN Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies position performs unexpectedly, NuRAN Wireless 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 NuRAN Wireless will offset losses from the drop in NuRAN Wireless' long position.
The idea behind Kandi Technologies Group and NuRAN Wireless 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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