Correlation Between REVO INSURANCE and KERNEL HLDG
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE and KERNEL HLDG 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 REVO INSURANCE and KERNEL HLDG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and KERNEL HLDG, you can compare the effects of market volatilities on REVO INSURANCE and KERNEL HLDG 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 REVO INSURANCE with a short position of KERNEL HLDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and KERNEL HLDG.
Diversification Opportunities for REVO INSURANCE and KERNEL HLDG
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between REVO and KERNEL is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and KERNEL HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KERNEL HLDG and REVO INSURANCE 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 REVO INSURANCE SPA are associated (or correlated) with KERNEL HLDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KERNEL HLDG has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and KERNEL HLDG go up and down completely randomly.
Pair Corralation between REVO INSURANCE and KERNEL HLDG
Assuming the 90 days horizon REVO INSURANCE is expected to generate 58.63 times less return on investment than KERNEL HLDG. But when comparing it to its historical volatility, REVO INSURANCE SPA is 1.1 times less risky than KERNEL HLDG. It trades about 0.01 of its potential returns per unit of risk. KERNEL HLDG is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 293.00 in KERNEL HLDG on October 25, 2024 and sell it today you would earn a total of 98.00 from holding KERNEL HLDG or generate 33.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. KERNEL HLDG
Performance |
| Timeline |
| REVO INSURANCE SPA |
| KERNEL HLDG |
REVO INSURANCE and KERNEL HLDG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and KERNEL HLDG
The main advantage of trading using opposite REVO INSURANCE and KERNEL HLDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE position performs unexpectedly, KERNEL HLDG 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 HLDG will offset losses from the drop in KERNEL HLDG's long position.| REVO INSURANCE vs. Kingdee International Software | REVO INSURANCE vs. CyberArk Software | REVO INSURANCE vs. WIMFARM SA EO | REVO INSURANCE vs. Check Point Software |
| KERNEL HLDG vs. Japan Medical Dynamic | KERNEL HLDG vs. CarsalesCom | KERNEL HLDG vs. Medical Properties Trust | KERNEL HLDG vs. Tradeweb Markets |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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