Correlation Between Kingdee International and AOZORA BANK

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

Diversification Opportunities for Kingdee International and AOZORA BANK

0.22

Correlation Coefficient

Kingdee International  AOZORA BANK

Modest diversification

The 3 months correlation between Kingdee and AOZORA is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and AOZORA BANK LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOZORA BANK LTD 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 AOZORA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOZORA BANK LTD has no effect on the direction of Kingdee International i.e., Kingdee International and AOZORA BANK go up and down completely randomly.

Pair Corralation between Kingdee International and AOZORA BANK

Assuming the 90 days trading horizon Kingdee International Software is expected to generate 1.7 times more return on investment than AOZORA BANK. However, Kingdee International is 1.7 times more volatile than AOZORA BANK LTD. It trades about 0.02 of its potential returns per unit of risk. AOZORA BANK LTD is currently generating about -0.02 per unit of risk. If you would invest  157.00  in Kingdee International Software on April 20, 2025 and sell it today you would earn a total of  9.00  from holding Kingdee International Software or generate 5.73% return on investment over 90 days.

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

Kingdee International Software  vs.  AOZORA BANK LTD

Kingdee International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, Kingdee International reported solid returns over the last few months and may actually be approaching a breakup point.

AOZORA BANK LTD

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AOZORA BANK LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AOZORA BANK may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Kingdee International and AOZORA BANK

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

The idea behind Kingdee International Software and AOZORA BANK LTD 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.