Correlation Between Even Herd and KFA Mount
Can any of the company-specific risk be diversified away by investing in both Even Herd and KFA Mount 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 Even Herd and KFA Mount into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Even Herd Long and KFA Mount Lucas, you can compare the effects of market volatilities on Even Herd and KFA Mount 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 Even Herd with a short position of KFA Mount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Even Herd and KFA Mount.
Diversification Opportunities for Even Herd and KFA Mount
Excellent diversification
The 3 months correlation between Even and KFA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Even Herd Long and KFA Mount Lucas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KFA Mount Lucas and Even Herd 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 Even Herd Long are associated (or correlated) with KFA Mount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KFA Mount Lucas has no effect on the direction of Even Herd i.e., Even Herd and KFA Mount go up and down completely randomly.
Pair Corralation between Even Herd and KFA Mount
Given the investment horizon of 90 days Even Herd Long is expected to generate 1.53 times more return on investment than KFA Mount. However, Even Herd is 1.53 times more volatile than KFA Mount Lucas. It trades about 0.08 of its potential returns per unit of risk. KFA Mount Lucas is currently generating about -0.03 per unit of risk. If you would invest 1,992 in Even Herd Long on September 12, 2024 and sell it today you would earn a total of 303.00 from holding Even Herd Long or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 35.76% |
| Values | Daily Returns |
Even Herd Long vs. KFA Mount Lucas
Performance |
| Timeline |
| Even Herd Long |
| KFA Mount Lucas |
Even Herd and KFA Mount Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Even Herd and KFA Mount
The main advantage of trading using opposite Even Herd and KFA Mount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Even Herd position performs unexpectedly, KFA Mount 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 KFA Mount will offset losses from the drop in KFA Mount's long position.| Even Herd vs. Freedom Day Dividend | Even Herd vs. Franklin Templeton ETF | Even Herd vs. iShares MSCI China | Even Herd vs. Tidal Trust II |
| KFA Mount vs. First Trust Managed | KFA Mount vs. iMGP DBi Managed | KFA Mount vs. First Trust LongShort | KFA Mount vs. WisdomTree CBOE SP |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |