Correlation Between Strategic Investments and KRAKATAU STEEL
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and KRAKATAU STEEL 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 Strategic Investments and KRAKATAU STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and KRAKATAU STEEL B , you can compare the effects of market volatilities on Strategic Investments and KRAKATAU STEEL 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 Strategic Investments with a short position of KRAKATAU STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and KRAKATAU STEEL.
Diversification Opportunities for Strategic Investments and KRAKATAU STEEL
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Strategic and KRAKATAU is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and KRAKATAU STEEL B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAKATAU STEEL B and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with KRAKATAU STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAKATAU STEEL B has no effect on the direction of Strategic Investments i.e., Strategic Investments and KRAKATAU STEEL go up and down completely randomly.
Pair Corralation between Strategic Investments and KRAKATAU STEEL
Assuming the 90 days horizon Strategic Investments is expected to generate 1.88 times less return on investment than KRAKATAU STEEL. But when comparing it to its historical volatility, Strategic Investments AS is 1.29 times less risky than KRAKATAU STEEL. It trades about 0.02 of its potential returns per unit of risk. KRAKATAU STEEL B is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.55 in KRAKATAU STEEL B on October 7, 2024 and sell it today you would lose (1.70) from holding KRAKATAU STEEL B or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. KRAKATAU STEEL B
Performance |
| Timeline |
| Strategic Investments |
| KRAKATAU STEEL B |
Strategic Investments and KRAKATAU STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and KRAKATAU STEEL
The main advantage of trading using opposite Strategic Investments and KRAKATAU STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, KRAKATAU STEEL 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 KRAKATAU STEEL will offset losses from the drop in KRAKATAU STEEL's long position.| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings |
| KRAKATAU STEEL vs. Apple Inc | KRAKATAU STEEL vs. Apple Inc | KRAKATAU STEEL vs. Apple Inc | KRAKATAU STEEL vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |