Correlation Between Kool2play and Carlson Investments
Can any of the company-specific risk be diversified away by investing in both Kool2play and Carlson Investments 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 Kool2play and Carlson Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kool2play SA and Carlson Investments SA, you can compare the effects of market volatilities on Kool2play and Carlson Investments 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 Kool2play with a short position of Carlson Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kool2play and Carlson Investments.
Diversification Opportunities for Kool2play and Carlson Investments
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kool2play and Carlson is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kool2play SA and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments and Kool2play 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 Kool2play SA are associated (or correlated) with Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of Kool2play i.e., Kool2play and Carlson Investments go up and down completely randomly.
Pair Corralation between Kool2play and Carlson Investments
Assuming the 90 days trading horizon Kool2play SA is expected to generate 1.36 times more return on investment than Carlson Investments. However, Kool2play is 1.36 times more volatile than Carlson Investments SA. It trades about -0.02 of its potential returns per unit of risk. Carlson Investments SA is currently generating about -0.07 per unit of risk. If you would invest 420.00 in Kool2play SA on August 29, 2024 and sell it today you would lose (325.00) from holding Kool2play SA or give up 77.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.68% |
| Values | Daily Returns |
Kool2play SA vs. Carlson Investments SA
Performance |
| Timeline |
| Kool2play SA |
| Carlson Investments |
Kool2play and Carlson Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kool2play and Carlson Investments
The main advantage of trading using opposite Kool2play and Carlson Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kool2play position performs unexpectedly, Carlson Investments 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 Carlson Investments will offset losses from the drop in Carlson Investments' long position.| Kool2play vs. Clean Carbon Energy | Kool2play vs. ADX | Kool2play vs. Agroliga Group PLC | Kool2play vs. Vee SA |
| Carlson Investments vs. Centrum Finansowe Banku | Carlson Investments vs. Asseco Business Solutions | Carlson Investments vs. Detalion Games SA | Carlson Investments vs. CFI Holding SA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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