Correlation Between KION Group and Qingling Motors

Can any of the company-specific risk be diversified away by investing in both KION Group and Qingling Motors 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 KION Group and Qingling Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KION Group AG and Qingling Motors Co, you can compare the effects of market volatilities on KION Group and Qingling Motors 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 KION Group with a short position of Qingling Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of KION Group and Qingling Motors.

Diversification Opportunities for KION Group and Qingling Motors

0.83

Correlation Coefficient

KION Group  Qingling Motors

Very poor diversification

The 3 months correlation between KION and Qingling is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding KION Group AG and Qingling Motors Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingling Motors and KION Group 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 KION Group AG are associated (or correlated) with Qingling Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingling Motors has no effect on the direction of KION Group i.e., KION Group and Qingling Motors go up and down completely randomly.

Pair Corralation between KION Group and Qingling Motors

Assuming the 90 days horizon KION Group is expected to generate 1.41 times less return on investment than Qingling Motors. But when comparing it to its historical volatility, KION Group AG is 1.85 times less risky than Qingling Motors. It trades about 0.29 of its potential returns per unit of risk. Qingling Motors Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  5.14  in Qingling Motors Co on April 25, 2025 and sell it today you would earn a total of  3.34  from holding Qingling Motors Co or generate 64.98% return on investment over 90 days.

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

KION Group AG  vs.  Qingling Motors Co

KION Group AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KION Group AG are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, KION Group reported solid returns over the last few months and may actually be approaching a breakup point.

Qingling Motors

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Qingling Motors Co are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Qingling Motors reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KION Group and Qingling Motors

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

The idea behind KION Group AG and Qingling Motors Co 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.