Correlation Between Finance Of and KYN Capital
Can any of the company-specific risk be diversified away by investing in both Finance Of 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 Finance Of and KYN Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finance of America and KYN Capital Group, you can compare the effects of market volatilities on Finance Of 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 Finance Of with a short position of KYN Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finance Of and KYN Capital.
Diversification Opportunities for Finance Of and KYN Capital
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Finance and KYN is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Finance of America 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 Finance Of 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 Finance of America 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 Finance Of i.e., Finance Of and KYN Capital go up and down completely randomly.
Pair Corralation between Finance Of and KYN Capital
Considering the 90-day investment horizon Finance Of is expected to generate 5.23 times less return on investment than KYN Capital. But when comparing it to its historical volatility, Finance of America is 2.61 times less risky than KYN Capital. It trades about 0.04 of its potential returns per unit of risk. KYN Capital Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.05 in KYN Capital Group on August 30, 2024 and sell it today you would earn a total of 0.02 from holding KYN Capital Group or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Finance of America vs. KYN Capital Group
Performance |
| Timeline |
| Finance of America |
| KYN Capital Group |
Finance Of and KYN Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finance Of and KYN Capital
The main advantage of trading using opposite Finance Of and KYN Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finance Of 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.| Finance Of vs. Regional Management Corp | Finance Of vs. Orix Corp Ads | Finance Of vs. FirstCash | Finance Of vs. EZCORP Inc |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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