Correlation Between Ampleforth and KIN
Can any of the company-specific risk be diversified away by investing in both Ampleforth and KIN 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 Ampleforth and KIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ampleforth and KIN, you can compare the effects of market volatilities on Ampleforth and KIN 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 Ampleforth with a short position of KIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ampleforth and KIN.
Diversification Opportunities for Ampleforth and KIN
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ampleforth and KIN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ampleforth and KIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIN and Ampleforth 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 Ampleforth are associated (or correlated) with KIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIN has no effect on the direction of Ampleforth i.e., Ampleforth and KIN go up and down completely randomly.
Pair Corralation between Ampleforth and KIN
Assuming the 90 days trading horizon Ampleforth is expected to generate 1.04 times less return on investment than KIN. But when comparing it to its historical volatility, Ampleforth is 1.38 times less risky than KIN. It trades about 0.12 of its potential returns per unit of risk. KIN is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.00 in KIN on September 3, 2024 and sell it today you would earn a total of 0.00 from holding KIN or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ampleforth vs. KIN
Performance |
| Timeline |
| Ampleforth |
| KIN |
Ampleforth and KIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ampleforth and KIN
The main advantage of trading using opposite Ampleforth and KIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ampleforth position performs unexpectedly, KIN 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 KIN will offset losses from the drop in KIN's long position.The idea behind Ampleforth and KIN 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |