Correlation Between A1 and Kasten
Can any of the company-specific risk be diversified away by investing in both A1 and Kasten 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 A1 and Kasten into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A1 Group and Kasten Inc, you can compare the effects of market volatilities on A1 and Kasten 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 A1 with a short position of Kasten. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1 and Kasten.
Diversification Opportunities for A1 and Kasten
Very good diversification
The 3 months correlation between A1 and Kasten is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding A1 Group and Kasten Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasten Inc and A1 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 A1 Group are associated (or correlated) with Kasten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasten Inc has no effect on the direction of A1 i.e., A1 and Kasten go up and down completely randomly.
Pair Corralation between A1 and Kasten
Given the investment horizon of 90 days A1 Group is expected to under-perform the Kasten. In addition to that, A1 is 1.37 times more volatile than Kasten Inc. It trades about -0.07 of its total potential returns per unit of risk. Kasten Inc is currently generating about 0.04 per unit of volatility. If you would invest 0.68 in Kasten Inc on September 1, 2024 and sell it today you would lose (0.08) from holding Kasten Inc or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
A1 Group vs. Kasten Inc
Performance |
| Timeline |
| A1 Group |
| Kasten Inc |
A1 and Kasten Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A1 and Kasten
The main advantage of trading using opposite A1 and Kasten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1 position performs unexpectedly, Kasten 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 Kasten will offset losses from the drop in Kasten's long position.The idea behind A1 Group and Kasten Inc 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.| Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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