Correlation Between Kool2play and HM Inwest
Can any of the company-specific risk be diversified away by investing in both Kool2play and HM Inwest 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 HM Inwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kool2play SA and HM Inwest SA, you can compare the effects of market volatilities on Kool2play and HM Inwest 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 HM Inwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kool2play and HM Inwest.
Diversification Opportunities for Kool2play and HM Inwest
Very good diversification
The 3 months correlation between Kool2play and HMI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kool2play SA and HM Inwest SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HM Inwest SA 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 HM Inwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HM Inwest SA has no effect on the direction of Kool2play i.e., Kool2play and HM Inwest go up and down completely randomly.
Pair Corralation between Kool2play and HM Inwest
Assuming the 90 days trading horizon Kool2play SA is expected to under-perform the HM Inwest. But the stock apears to be less risky and, when comparing its historical volatility, Kool2play SA is 1.04 times less risky than HM Inwest. The stock trades about -0.14 of its potential returns per unit of risk. The HM Inwest SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,990 in HM Inwest SA on August 29, 2024 and sell it today you would earn a total of 830.00 from holding HM Inwest SA or generate 20.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.5% |
| Values | Daily Returns |
Kool2play SA vs. HM Inwest SA
Performance |
| Timeline |
| Kool2play SA |
| HM Inwest SA |
Kool2play and HM Inwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kool2play and HM Inwest
The main advantage of trading using opposite Kool2play and HM Inwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kool2play position performs unexpectedly, HM Inwest 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 HM Inwest will offset losses from the drop in HM Inwest's long position.| Kool2play vs. Clean Carbon Energy | Kool2play vs. ADX | Kool2play vs. Agroliga Group PLC | Kool2play vs. Vee SA |
| HM Inwest vs. True Games Syndicate | HM Inwest vs. Tower Investments SA | HM Inwest vs. Kool2play SA | HM Inwest vs. Gaming Factory 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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