Correlation Between KYN Capital and Dunxin Financial

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

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

Diversification Opportunities for KYN Capital and Dunxin Financial

0.45

Correlation Coefficient

KYN Capital  Dunxin Financial

Very weak diversification

The 3 months correlation between KYN and Dunxin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KYN Capital Group and Dunxin Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunxin Financial Holdings and KYN Capital 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 KYN Capital Group are associated (or correlated) with Dunxin Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunxin Financial Holdings has no effect on the direction of KYN Capital i.e., KYN Capital and Dunxin Financial go up and down completely randomly.

Pair Corralation between KYN Capital and Dunxin Financial

If you would invest  3.50  in Dunxin Financial Holdings on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Dunxin Financial Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

KYN Capital Group  vs.  Dunxin Financial Holdings

KYN Capital Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KYN Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, KYN Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Dunxin Financial Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunxin Financial Holdings 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.

Pair Trading with KYN Capital and Dunxin Financial

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

The idea behind KYN Capital Group and Dunxin Financial Holdings 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..