Correlation Between Kingdee International and GURU ORGANIC

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

Diversification Opportunities for Kingdee International and GURU ORGANIC

0.49

Correlation Coefficient

Kingdee International  GURU ORGANIC

Very weak diversification

The 3 months correlation between Kingdee and GURU is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and GURU ORGANIC ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GURU ORGANIC ENERGY 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 GURU ORGANIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GURU ORGANIC ENERGY has no effect on the direction of Kingdee International i.e., Kingdee International and GURU ORGANIC go up and down completely randomly.

Pair Corralation between Kingdee International and GURU ORGANIC

Assuming the 90 days trading horizon Kingdee International is expected to generate 1.09 times less return on investment than GURU ORGANIC. In addition to that, Kingdee International is 1.07 times more volatile than GURU ORGANIC ENERGY. It trades about 0.08 of its total potential returns per unit of risk. GURU ORGANIC ENERGY is currently generating about 0.09 per unit of volatility. If you would invest  81.00  in GURU ORGANIC ENERGY on March 25, 2025 and sell it today you would earn a total of  34.00  from holding GURU ORGANIC ENERGY or generate 41.98% 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.  GURU ORGANIC ENERGY

Kingdee International

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kingdee International Software are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Kingdee International may actually be approaching a critical reversion point that can send shares even higher in July 2025.

GURU ORGANIC ENERGY

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GURU ORGANIC ENERGY are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GURU ORGANIC may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Kingdee International and GURU ORGANIC

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

The idea behind Kingdee International Software and GURU ORGANIC ENERGY 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.