Correlation Between Kool2play and KCI SA
Can any of the company-specific risk be diversified away by investing in both Kool2play and KCI SA 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 KCI SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kool2play SA and KCI SA, you can compare the effects of market volatilities on Kool2play and KCI SA 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 KCI SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kool2play and KCI SA.
Diversification Opportunities for Kool2play and KCI SA
Good diversification
The 3 months correlation between Kool2play and KCI is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kool2play SA and KCI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCI 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 KCI SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCI SA has no effect on the direction of Kool2play i.e., Kool2play and KCI SA go up and down completely randomly.
Pair Corralation between Kool2play and KCI SA
Assuming the 90 days trading horizon Kool2play SA is expected to under-perform the KCI SA. In addition to that, Kool2play is 3.9 times more volatile than KCI SA. It trades about -0.12 of its total potential returns per unit of risk. KCI SA is currently generating about -0.06 per unit of volatility. If you would invest 80.00 in KCI SA on August 26, 2024 and sell it today you would lose (1.00) from holding KCI SA or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Kool2play SA vs. KCI SA
Performance |
| Timeline |
| Kool2play SA |
| KCI SA |
Kool2play and KCI SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kool2play and KCI SA
The main advantage of trading using opposite Kool2play and KCI SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kool2play position performs unexpectedly, KCI SA 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 KCI SA will offset losses from the drop in KCI SA's long position.| Kool2play vs. Clean Carbon Energy | Kool2play vs. ADX | Kool2play vs. Agroliga Group PLC | Kool2play vs. Vee SA |
| KCI SA vs. SOFTWARE MANSION SPOLKA | KCI SA vs. Medicofarma Biotech SA | KCI SA vs. Kool2play SA | KCI SA 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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