Correlation Between Kingsoft Cloud and Duos Technologies

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

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

Diversification Opportunities for Kingsoft Cloud and Duos Technologies

0.15

Correlation Coefficient

Kingsoft Cloud  Duos Technologies

Average diversification

The 3 months correlation between Kingsoft and Duos is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kingsoft Cloud HoldingsLtd and Duos Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duos Technologies and Kingsoft Cloud 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 Kingsoft Cloud HoldingsLtd are associated (or correlated) with Duos Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duos Technologies has no effect on the direction of Kingsoft Cloud i.e., Kingsoft Cloud and Duos Technologies go up and down completely randomly.

Pair Corralation between Kingsoft Cloud and Duos Technologies

Allowing for the 90-day total investment horizon Kingsoft Cloud HoldingsLtd is expected to generate 1.01 times more return on investment than Duos Technologies. However, Kingsoft Cloud is 1.01 times more volatile than Duos Technologies Group. It trades about 0.02 of its potential returns per unit of risk. Duos Technologies Group is currently generating about 0.02 per unit of risk. If you would invest  349.00  in Kingsoft Cloud HoldingsLtd on January 17, 2024 and sell it today you would lose (90.00) from holding Kingsoft Cloud HoldingsLtd or give up 25.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Kingsoft Cloud HoldingsLtd  vs.  Duos Technologies Group

Kingsoft Cloud Holdi

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsoft Cloud HoldingsLtd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Kingsoft Cloud is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Duos Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duos Technologies Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Duos Technologies is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kingsoft Cloud and Duos Technologies

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

The idea behind Kingsoft Cloud HoldingsLtd and Duos 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.