Correlation Between Blue Bird and Kandi Technologies

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Can any of the company-specific risk be diversified away by investing in both Blue Bird 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 Blue Bird and Kandi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Bird Corp and Kandi Technologies Group, you can compare the effects of market volatilities on Blue Bird 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 Blue Bird with a short position of Kandi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and Kandi Technologies.

Diversification Opportunities for Blue Bird and Kandi Technologies

-0.83
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Blue and Kandi is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Corp and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and Blue Bird 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 Blue Bird Corp 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 Blue Bird i.e., Blue Bird and Kandi Technologies go up and down completely randomly.

Pair Corralation between Blue Bird and Kandi Technologies

Given the investment horizon of 90 days Blue Bird Corp is expected to generate 1.17 times more return on investment than Kandi Technologies. However, Blue Bird is 1.17 times more volatile than Kandi Technologies Group. It trades about 0.29 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about -0.45 per unit of risk. If you would invest  3,299  in Blue Bird Corp on December 29, 2023 and sell it today you would earn a total of  486.00  from holding Blue Bird Corp or generate 14.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Blue Bird Corp  vs.  Kandi Technologies Group

 Performance 
       Timeline  
Blue Bird Corp 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Bird Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental drivers, Blue Bird exhibited solid returns over the last few months and may actually be approaching a breakup point.
Kandi Technologies 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Blue Bird and Kandi Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blue Bird and Kandi Technologies

The main advantage of trading using opposite Blue Bird and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird 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 Blue Bird Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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