Correlation Between IShares Semiconductor and Kandi Technologies

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

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

Diversification Opportunities for IShares Semiconductor and Kandi Technologies

-0.7

Correlation Coefficient

IShares Semiconductor  Kandi Technologies

Excellent diversification

The 3 months correlation between IShares and Kandi is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding iShares Semiconductor ETF and Kandi Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kandi Technologies and IShares Semiconductor 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 iShares Semiconductor ETF 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 IShares Semiconductor i.e., IShares Semiconductor and Kandi Technologies go up and down completely randomly.

Pair Corralation between IShares Semiconductor and Kandi Technologies

Given the investment horizon of 90 days IShares Semiconductor is expected to generate 2.44 times less return on investment than Kandi Technologies. But when comparing it to its historical volatility, iShares Semiconductor ETF is 1.45 times less risky than Kandi Technologies. It trades about 0.03 of its potential returns per unit of risk. Kandi Technologies Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  251.00  in Kandi Technologies Group on January 28, 2024 and sell it today you would earn a total of  10.00  from holding Kandi Technologies Group or generate 3.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.73%
Values	Daily Returns

iShares Semiconductor ETF  vs.  Kandi Technologies Group

iShares Semiconductor ETF

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Semiconductor ETF are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, IShares Semiconductor may actually be approaching a critical reversion point that can send shares even higher in May 2024.

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IShares Semiconductor and Kandi Technologies

The main advantage of trading using opposite IShares Semiconductor and Kandi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Semiconductor 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 iShares Semiconductor ETF 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.