Correlation Between Kingdee International and Applied Materials
Can any of the company-specific risk be diversified away by investing in both Kingdee International and Applied Materials 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 Applied Materials 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 Applied Materials, you can compare the effects of market volatilities on Kingdee International and Applied Materials 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 Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Applied Materials.
Diversification Opportunities for Kingdee International and Applied Materials
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kingdee and Applied is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials 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 Applied Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials has no effect on the direction of Kingdee International i.e., Kingdee International and Applied Materials go up and down completely randomly.
Pair Corralation between Kingdee International and Applied Materials
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the Applied Materials. In addition to that, Kingdee International is 1.05 times more volatile than Applied Materials. It trades about -0.03 of its total potential returns per unit of risk. Applied Materials is currently generating about 0.1 per unit of volatility. If you would invest 16,252 in Applied Materials on July 20, 2025 and sell it today you would earn a total of 2,934 from holding Applied Materials or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. Applied Materials
Performance |
| Timeline |
| Kingdee International |
| Applied Materials |
Kingdee International and Applied Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Applied Materials
The main advantage of trading using opposite Kingdee International and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International position performs unexpectedly, Applied Materials 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 Applied Materials will offset losses from the drop in Applied Materials' long position.| Kingdee International vs. VARIOUS EATERIES LS | Kingdee International vs. Luckin Coffee | Kingdee International vs. Easy Software AG | Kingdee International vs. Magic Software Enterprises |
| Applied Materials vs. ARROW ELECTRONICS | Applied Materials vs. NEWELL RUBBERMAID | Applied Materials vs. UNIVERSAL MUSIC GROUP | Applied Materials vs. United Microelectronics Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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