Correlation Between INEO Tech and Kidoz
Can any of the company-specific risk be diversified away by investing in both INEO Tech and Kidoz 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 INEO Tech and Kidoz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INEO Tech Corp and Kidoz Inc, you can compare the effects of market volatilities on INEO Tech and Kidoz 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 INEO Tech with a short position of Kidoz. Check out your portfolio center. Please also check ongoing floating volatility patterns of INEO Tech and Kidoz.
Diversification Opportunities for INEO Tech and Kidoz
Very good diversification
The 3 months correlation between INEO and Kidoz is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding INEO Tech Corp and Kidoz Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidoz Inc and INEO Tech 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 INEO Tech Corp are associated (or correlated) with Kidoz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kidoz Inc has no effect on the direction of INEO Tech i.e., INEO Tech and Kidoz go up and down completely randomly.
Pair Corralation between INEO Tech and Kidoz
Assuming the 90 days horizon INEO Tech is expected to generate 10.68 times less return on investment than Kidoz. But when comparing it to its historical volatility, INEO Tech Corp is 3.25 times less risky than Kidoz. It trades about 0.04 of its potential returns per unit of risk. Kidoz Inc is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Kidoz Inc on August 27, 2024 and sell it today you would lose (7.00) from holding Kidoz Inc or give up 70.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INEO Tech Corp vs. Kidoz Inc
Performance |
| Timeline |
| INEO Tech Corp |
| Kidoz Inc |
INEO Tech and Kidoz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INEO Tech and Kidoz
The main advantage of trading using opposite INEO Tech and Kidoz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INEO Tech position performs unexpectedly, Kidoz 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 Kidoz will offset losses from the drop in Kidoz's long position.The idea behind INEO Tech Corp and Kidoz Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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