Correlation Between KE Holdings and Boqii Holding

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

Diversification Opportunities for KE Holdings and Boqii Holding

-0.58
  Correlation Coefficient

Excellent diversification

The 3 months correlation between KE Holdings and Boqii is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding KE Holdings Inc and Boqii Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boqii Holding and KE Holdings 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 KE Holdings are associated (or correlated) with Boqii Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boqii Holding has no effect on the direction of KE Holdings i.e., KE Holdings and Boqii Holding go up and down completely randomly.

Pair Corralation between KE Holdings and Boqii Holding

Given the investment horizon of 90 days KE Holdings is expected to generate 0.67 times more return on investment than Boqii Holding. However, KE Holdings is 1.5 times less risky than Boqii Holding. It trades about -0.15 of its potential returns per unit of risk. Boqii Holding is currently generating about -0.33 per unit of risk. If you would invest  1,820  in KE Holdings on June 27, 2022 and sell it today you would lose (190.00)  from holding KE Holdings or give up 10.44% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

KE Holdings Inc  vs.  Boqii Holding Ltd

 Performance (%) 
       Timeline  
KE Holdings 
KE Holdings Performance
0 of 100
Over the last 90 days KE Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, KE Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

KE Holdings Price Channel

Boqii Holding 
Boqii Performance
0 of 100
Over the last 90 days Boqii Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Boqii Price Channel

KE Holdings and Boqii Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KE Holdings and Boqii Holding

The main advantage of trading using opposite KE Holdings and Boqii Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KE Holdings position performs unexpectedly, Boqii Holding 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 Boqii Holding will offset losses from the drop in Boqii Holding's long position.
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The idea behind KE Holdings and Boqii Holding 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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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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