Correlation Between Kingdee International and FORTRESS BIOTECHPRFA

Can any of the company-specific risk be diversified away by investing in both Kingdee International and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA 25, you can compare the effects of market volatilities on Kingdee International and FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and FORTRESS BIOTECHPRFA.

Diversification Opportunities for Kingdee International and FORTRESS BIOTECHPRFA

0.45

Correlation Coefficient

Kingdee International  FORTRESS BIOTECHPRFA

Very weak diversification

The 3 months correlation between Kingdee and FORTRESS is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and FORTRESS BIOTECHPRFA 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTRESS BIOTECHPRFA 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 FORTRESS BIOTECHPRFA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTRESS BIOTECHPRFA has no effect on the direction of Kingdee International i.e., Kingdee International and FORTRESS BIOTECHPRFA go up and down completely randomly.

Pair Corralation between Kingdee International and FORTRESS BIOTECHPRFA

Assuming the 90 days trading horizon Kingdee International Software is expected to generate 0.66 times more return on investment than FORTRESS BIOTECHPRFA. However, Kingdee International Software is 1.52 times less risky than FORTRESS BIOTECHPRFA. It trades about 0.15 of its potential returns per unit of risk. FORTRESS BIOTECHPRFA 25 is currently generating about 0.07 per unit of risk. If you would invest  135.00  in Kingdee International Software on April 23, 2025 and sell it today you would earn a total of  42.00  from holding Kingdee International Software or generate 31.11% return on investment over 90 days.

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

Kingdee International Software  vs.  FORTRESS BIOTECHPRFA 25

Kingdee International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Kingdee International reported solid returns over the last few months and may actually be approaching a breakup point.

FORTRESS BIOTECHPRFA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FORTRESS BIOTECHPRFA 25 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, FORTRESS BIOTECHPRFA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingdee International and FORTRESS BIOTECHPRFA

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

The idea behind Kingdee International Software and FORTRESS BIOTECHPRFA 25 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.