Correlation Between KOOL2PLAY and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both KOOL2PLAY and Strategic Investments 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 KOOL2PLAY and Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOOL2PLAY SA ZY and Strategic Investments AS, you can compare the effects of market volatilities on KOOL2PLAY and Strategic Investments 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 KOOL2PLAY with a short position of Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOOL2PLAY and Strategic Investments.
Diversification Opportunities for KOOL2PLAY and Strategic Investments
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KOOL2PLAY and Strategic is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding KOOL2PLAY SA ZY and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments and KOOL2PLAY 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 KOOL2PLAY SA ZY are associated (or correlated) with Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of KOOL2PLAY i.e., KOOL2PLAY and Strategic Investments go up and down completely randomly.
Pair Corralation between KOOL2PLAY and Strategic Investments
Assuming the 90 days horizon KOOL2PLAY SA ZY is expected to generate 1.49 times more return on investment than Strategic Investments. However, KOOL2PLAY is 1.49 times more volatile than Strategic Investments AS. It trades about 0.2 of its potential returns per unit of risk. Strategic Investments AS is currently generating about -0.2 per unit of risk. If you would invest 15.00 in KOOL2PLAY SA ZY on September 12, 2024 and sell it today you would earn a total of 3.00 from holding KOOL2PLAY SA ZY or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOOL2PLAY SA ZY vs. Strategic Investments AS
Performance |
| Timeline |
| KOOL2PLAY SA ZY |
| Strategic Investments |
KOOL2PLAY and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOOL2PLAY and Strategic Investments
The main advantage of trading using opposite KOOL2PLAY and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOOL2PLAY position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| KOOL2PLAY vs. NEXON Co | KOOL2PLAY vs. Take Two Interactive Software | KOOL2PLAY vs. Superior Plus Corp | KOOL2PLAY vs. SIVERS SEMICONDUCTORS AB |
| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
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 the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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