Correlation Between Kool2play and Investment Friends
Can any of the company-specific risk be diversified away by investing in both Kool2play and Investment Friends 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 Investment Friends into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kool2play SA and Investment Friends Capital, you can compare the effects of market volatilities on Kool2play and Investment Friends 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 Investment Friends. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kool2play and Investment Friends.
Diversification Opportunities for Kool2play and Investment Friends
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kool2play and Investment is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kool2play SA and Investment Friends Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Friends 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 Investment Friends. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Friends has no effect on the direction of Kool2play i.e., Kool2play and Investment Friends go up and down completely randomly.
Pair Corralation between Kool2play and Investment Friends
Assuming the 90 days trading horizon Kool2play SA is expected to under-perform the Investment Friends. But the stock apears to be less risky and, when comparing its historical volatility, Kool2play SA is 9.56 times less risky than Investment Friends. The stock trades about -0.05 of its potential returns per unit of risk. The Investment Friends Capital is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Investment Friends Capital on September 4, 2024 and sell it today you would earn a total of 428.00 from holding Investment Friends Capital or generate 419.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 71.08% |
| Values | Daily Returns |
Kool2play SA vs. Investment Friends Capital
Performance |
| Timeline |
| Kool2play SA |
| Investment Friends |
Kool2play and Investment Friends Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kool2play and Investment Friends
The main advantage of trading using opposite Kool2play and Investment Friends positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kool2play position performs unexpectedly, Investment Friends 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 Investment Friends will offset losses from the drop in Investment Friends' long position.| Kool2play vs. Clean Carbon Energy | Kool2play vs. ADX | Kool2play vs. Agroliga Group PLC | Kool2play vs. Vee SA |
| Investment Friends vs. Medicofarma Biotech SA | Investment Friends vs. Pyramid Games SA | Investment Friends vs. 3R Games SA | Investment Friends vs. Carlson Investments 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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