Correlation Between Exela Technologies and Kingsoft Cloud

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

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

Diversification Opportunities for Exela Technologies and Kingsoft Cloud

0.74

Correlation Coefficient

Exela Technologies  Kingsoft Cloud

Poor diversification

The 3 months correlation between Exela and Kingsoft is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Exela Technologies Preferred and Kingsoft Cloud Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsoft Cloud Holdings and Exela Technologies 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 Exela Technologies Preferred are associated (or correlated) with Kingsoft Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsoft Cloud Holdings has no effect on the direction of Exela Technologies i.e., Exela Technologies and Kingsoft Cloud go up and down completely randomly.

Pair Corralation between Exela Technologies and Kingsoft Cloud

Assuming the 90 days horizon Exela Technologies Preferred is expected to under-perform the Kingsoft Cloud. In addition to that, Exela Technologies is 1.15 times more volatile than Kingsoft Cloud Holdings. It trades about -0.08 of its total potential returns per unit of risk. Kingsoft Cloud Holdings is currently generating about -0.06 per unit of volatility. If you would invest  259.00  in Kingsoft Cloud Holdings on June 21, 2024 and sell it today you would lose (41.00) from holding Kingsoft Cloud Holdings or give up 15.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Exela Technologies Preferred  vs.  Kingsoft Cloud Holdings

Exela Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exela Technologies Preferred has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in October 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kingsoft Cloud Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingsoft Cloud Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in October 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Exela Technologies and Kingsoft Cloud

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

The idea behind Exela Technologies Preferred and Kingsoft Cloud Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.