Correlation Between L Brands and Kongzhong Corp
Can any of the company-specific risk be diversified away by investing in both L Brands and Kongzhong Corp 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 L Brands and Kongzhong Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between L Brands and Kongzhong Corp, you can compare the effects of market volatilities on L Brands and Kongzhong Corp 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 L Brands with a short position of Kongzhong Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of L Brands and Kongzhong Corp.
Diversification Opportunities for L Brands and Kongzhong Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between L Brands and Kongzhong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding L Brands and Kongzhong Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongzhong Corp and L Brands 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 L Brands are associated (or correlated) with Kongzhong Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongzhong Corp has no effect on the direction of L Brands i.e., L Brands and Kongzhong Corp go up and down completely randomly.
Pair Corralation between L Brands and Kongzhong Corp
If you would invest (100.00) in Kongzhong Corp on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Kongzhong Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
L Brands vs. Kongzhong Corp
Performance |
| Timeline |
| L Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kongzhong Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
L Brands and Kongzhong Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with L Brands and Kongzhong Corp
The main advantage of trading using opposite L Brands and Kongzhong Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if L Brands position performs unexpectedly, Kongzhong Corp 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 Kongzhong Corp will offset losses from the drop in Kongzhong Corp's long position.The idea behind L Brands and Kongzhong Corp 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.| Kongzhong Corp vs. Kingdee International Software | Kongzhong Corp vs. Constellation Brands Class | Kongzhong Corp vs. Marie Brizard Wine | Kongzhong Corp vs. Cadence Design Systems |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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