Correlation Between Blockchain Industries and KAT Exploration
Can any of the company-specific risk be diversified away by investing in both Blockchain Industries and KAT Exploration 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 Blockchain Industries and KAT Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blockchain Industries and KAT Exploration, you can compare the effects of market volatilities on Blockchain Industries and KAT Exploration 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 Blockchain Industries with a short position of KAT Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blockchain Industries and KAT Exploration.
Diversification Opportunities for Blockchain Industries and KAT Exploration
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Blockchain and KAT is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Industries and KAT Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAT Exploration and Blockchain Industries 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 Blockchain Industries are associated (or correlated) with KAT Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAT Exploration has no effect on the direction of Blockchain Industries i.e., Blockchain Industries and KAT Exploration go up and down completely randomly.
Pair Corralation between Blockchain Industries and KAT Exploration
Given the investment horizon of 90 days Blockchain Industries is expected to generate 0.79 times more return on investment than KAT Exploration. However, Blockchain Industries is 1.26 times less risky than KAT Exploration. It trades about 0.15 of its potential returns per unit of risk. KAT Exploration is currently generating about 0.02 per unit of risk. If you would invest 1.22 in Blockchain Industries on August 30, 2024 and sell it today you would earn a total of 0.38 from holding Blockchain Industries or generate 31.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blockchain Industries vs. KAT Exploration
Performance |
| Timeline |
| Blockchain Industries |
| KAT Exploration |
Blockchain Industries and KAT Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blockchain Industries and KAT Exploration
The main advantage of trading using opposite Blockchain Industries and KAT Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockchain Industries position performs unexpectedly, KAT Exploration 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 KAT Exploration will offset losses from the drop in KAT Exploration's long position.| Blockchain Industries vs. Green Planet Bio | Blockchain Industries vs. Azure Holding Group | Blockchain Industries vs. Four Leaf Acquisition | Blockchain Industries vs. Opus Magnum Ameris |
| KAT Exploration vs. Silver Hammer Mining | KAT Exploration vs. Reyna Silver Corp | KAT Exploration vs. Guanajuato Silver | KAT Exploration vs. Silver One Resources |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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