Correlation Between Kingdee International and Verde Agritech

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

By analyzing existing cross correlation between Kingdee International Software and Verde Agritech PLC, you can compare the effects of market volatilities on Kingdee International and Verde Agritech 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 Kingdee International with a short position of Verde Agritech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Verde Agritech.

Diversification Opportunities for Kingdee International and Verde Agritech

0.0

Correlation Coefficient

Kingdee International  Verde Agritech

Pay attention - limited upside

The 3 months correlation between Kingdee and Verde is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Verde Agritech PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verde Agritech PLC and Kingdee International 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 Kingdee International Software are associated (or correlated) with Verde Agritech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verde Agritech PLC has no effect on the direction of Kingdee International i.e., Kingdee International and Verde Agritech go up and down completely randomly.

Pair Corralation between Kingdee International and Verde Agritech

If you would invest (100.00) in Verde Agritech PLC on February 26, 2024 and sell it today you would earn a total of  100.00  from holding Verde Agritech PLC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kingdee International Software  vs.  Verde Agritech PLC

Kingdee International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Kingdee International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Verde Agritech PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Verde Agritech PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Verde Agritech is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kingdee International and Verde Agritech

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

The idea behind Kingdee International Software and Verde Agritech PLC 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 Stocks Directory module to find actively traded stocks across global markets.