Correlation Between Kandi Technologies and Niu Technologies

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

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

Diversification Opportunities for Kandi Technologies and Niu Technologies

-0.12

Correlation Coefficient

Kandi Technologies  Niu Technologies

Good diversification

The 3 months correlation between Kandi and Niu is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies and Kandi Technologies 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 Kandi Technologies Group are associated (or correlated) with Niu Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niu Technologies has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Niu Technologies go up and down completely randomly.

Pair Corralation between Kandi Technologies and Niu Technologies

Given the investment horizon of 90 days Kandi Technologies Group is expected to generate 0.57 times more return on investment than Niu Technologies. However, Kandi Technologies Group is 1.75 times less risky than Niu Technologies. It trades about -0.01 of its potential returns per unit of risk. Niu Technologies is currently generating about -0.02 per unit of risk. If you would invest  304.00  in Kandi Technologies Group on January 31, 2024 and sell it today you would lose (40.00) from holding Kandi Technologies Group or give up 13.16% of portfolio value over 90 days.

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

Kandi Technologies Group  vs.  Niu Technologies

Kandi Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kandi Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Kandi Technologies is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Niu Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Niu Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward indicators, Niu Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kandi Technologies and Niu Technologies

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

The idea behind Kandi Technologies Group and Niu Technologies 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.