Correlation Between Financial Strategies and Kernel Group
Can any of the company-specific risk be diversified away by investing in both Financial Strategies and Kernel Group 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 Financial Strategies and Kernel Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Strategies Acquisition and Kernel Group Holdings, you can compare the effects of market volatilities on Financial Strategies and Kernel Group 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 Financial Strategies with a short position of Kernel Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Strategies and Kernel Group.
Diversification Opportunities for Financial Strategies and Kernel Group
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Financial and Kernel is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Financial Strategies Acquisiti and Kernel Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kernel Group Holdings and Financial Strategies 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 Financial Strategies Acquisition are associated (or correlated) with Kernel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kernel Group Holdings has no effect on the direction of Financial Strategies i.e., Financial Strategies and Kernel Group go up and down completely randomly.
Pair Corralation between Financial Strategies and Kernel Group
If you would invest 1,090 in Kernel Group Holdings on September 1, 2024 and sell it today you would lose (32.00) from holding Kernel Group Holdings or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.17% |
| Values | Daily Returns |
Financial Strategies Acquisiti vs. Kernel Group Holdings
Performance |
| Timeline |
| Financial Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kernel Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Financial Strategies and Kernel Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Strategies and Kernel Group
The main advantage of trading using opposite Financial Strategies and Kernel Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Strategies position performs unexpectedly, Kernel Group 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 Kernel Group will offset losses from the drop in Kernel Group's long position.The idea behind Financial Strategies Acquisition and Kernel Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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