Correlation Between Williams Sonoma and Kandi Technologies

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

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

Diversification Opportunities for Williams Sonoma and Kandi Technologies

-0.85

Correlation Coefficient

Williams Sonoma  Kandi Technologies

Pay attention - limited upside

The 3 months correlation between Williams and Kandi is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Williams Sonoma and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and Williams Sonoma 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 Williams Sonoma are associated (or correlated) with Kandi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kandi Technologies has no effect on the direction of Williams Sonoma i.e., Williams Sonoma and Kandi Technologies go up and down completely randomly.

Pair Corralation between Williams Sonoma and Kandi Technologies

Considering the 90-day investment horizon Williams Sonoma is expected to under-perform the Kandi Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Williams Sonoma is 2.43 times less risky than Kandi Technologies. The stock trades about -0.29 of its potential returns per unit of risk. The Kandi Technologies Group is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  218.00  in Kandi Technologies Group on January 31, 2024 and sell it today you would earn a total of  46.00  from holding Kandi Technologies Group or generate 21.1% return on investment over 90 days.

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

Williams Sonoma  vs.  Kandi Technologies Group

Williams Sonoma

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Williams Sonoma are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Williams Sonoma displayed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Williams Sonoma and Kandi Technologies

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

The idea behind Williams Sonoma and Kandi Technologies Group 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 Stocks Directory module to find actively traded stocks across global markets.