Correlation Between Capital One and KYN Capital
Can any of the company-specific risk be diversified away by investing in both Capital One and KYN Capital 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 Capital One and KYN Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital One Financial and KYN Capital Group, you can compare the effects of market volatilities on Capital One and KYN Capital 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 Capital One with a short position of KYN Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital One and KYN Capital.
Diversification Opportunities for Capital One and KYN Capital
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capital and KYN is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Capital One Financial and KYN Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYN Capital Group and Capital One 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 Capital One Financial are associated (or correlated) with KYN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYN Capital Group has no effect on the direction of Capital One i.e., Capital One and KYN Capital go up and down completely randomly.
Pair Corralation between Capital One and KYN Capital
Considering the 90-day investment horizon Capital One Financial is expected to generate 0.46 times more return on investment than KYN Capital. However, Capital One Financial is 2.16 times less risky than KYN Capital. It trades about 0.19 of its potential returns per unit of risk. KYN Capital Group is currently generating about -0.11 per unit of risk. If you would invest 16,623 in Capital One Financial on August 31, 2024 and sell it today you would earn a total of 2,506 from holding Capital One Financial or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital One Financial vs. KYN Capital Group
Performance |
| Timeline |
| Capital One Financial |
| KYN Capital Group |
Capital One and KYN Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital One and KYN Capital
The main advantage of trading using opposite Capital One and KYN Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital One position performs unexpectedly, KYN Capital 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 KYN Capital will offset losses from the drop in KYN Capital's long position.| Capital One vs. Mastercard | Capital One vs. Visa Class A | Capital One vs. PayPal Holdings | Capital One vs. Ally Financial |
| KYN Capital vs. Visa Class A | KYN Capital vs. Mastercard | KYN Capital vs. American Express | KYN Capital vs. PayPal Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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