Correlation Between African Gold and Kernel Group
Can any of the company-specific risk be diversified away by investing in both African Gold and Kernel Group 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 African Gold and Kernel Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between African Gold Acquisition and Kernel Group Holdings, you can compare the effects of market volatilities on African Gold and Kernel Group 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 African Gold with a short position of Kernel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of African Gold and Kernel Group.
Diversification Opportunities for African Gold and Kernel Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between African and Kernel is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding African Gold Acquisition and Kernel Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kernel Group Holdings and African Gold 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 African Gold Acquisition are associated (or correlated) with Kernel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kernel Group Holdings has no effect on the direction of African Gold i.e., African Gold and Kernel Group go up and down completely randomly.
Pair Corralation between African Gold and Kernel Group
If you would invest 1,030 in Kernel Group Holdings on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Kernel Group Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
African Gold Acquisition vs. Kernel Group Holdings
Performance |
| Timeline |
| African Gold Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kernel Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
African Gold and Kernel Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with African Gold and Kernel Group
The main advantage of trading using opposite African Gold and Kernel Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if African Gold position performs unexpectedly, Kernel Group 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 Kernel Group will offset losses from the drop in Kernel Group's long position.The idea behind African Gold Acquisition and Kernel Group 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.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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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