Correlation Between Kandi Technologies and Blue Bird
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies and Blue Bird 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 Blue Bird 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 Blue Bird Corp, you can compare the effects of market volatilities on Kandi Technologies and Blue Bird 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 Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Blue Bird.
Diversification Opportunities for Kandi Technologies and Blue Bird
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kandi and Blue is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Blue Bird Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Corp 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 Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Corp has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Blue Bird go up and down completely randomly.
Pair Corralation between Kandi Technologies and Blue Bird
Given the investment horizon of 90 days Kandi Technologies Group is expected to generate 1.23 times more return on investment than Blue Bird. However, Kandi Technologies is 1.23 times more volatile than Blue Bird Corp. It trades about 0.33 of its potential returns per unit of risk. Blue Bird Corp is currently generating about -0.07 per unit of risk. If you would invest 208.00 in Kandi Technologies Group on January 26, 2024 and sell it today you would earn a total of 53.00 from holding Kandi Technologies Group or generate 25.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandi Technologies Group vs. Blue Bird Corp
Performance |
| Timeline |
| Kandi Technologies |
| Blue Bird Corp |
Kandi Technologies and Blue Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandi Technologies and Blue Bird
The main advantage of trading using opposite Kandi Technologies and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.| Kandi Technologies vs. Fox Factory Holding | Kandi Technologies vs. Douglas Dynamics | Kandi Technologies vs. Monro Muffler Brake |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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