Correlation Between Kensington Active and Kensington Active
Can any of the company-specific risk be diversified away by investing in both Kensington Active and Kensington Active 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 Kensington Active and Kensington Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kensington Active Advantage and Kensington Active Advantage, you can compare the effects of market volatilities on Kensington Active and Kensington Active 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 Kensington Active with a short position of Kensington Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kensington Active and Kensington Active.
Diversification Opportunities for Kensington Active and Kensington Active
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Kensington and Kensington is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Kensington Active Advantage and Kensington Active Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Active and Kensington Active 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 Kensington Active Advantage are associated (or correlated) with Kensington Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Active has no effect on the direction of Kensington Active i.e., Kensington Active and Kensington Active go up and down completely randomly.
Pair Corralation between Kensington Active and Kensington Active
Assuming the 90 days horizon Kensington Active is expected to generate 1.13 times less return on investment than Kensington Active. But when comparing it to its historical volatility, Kensington Active Advantage is 1.01 times less risky than Kensington Active. It trades about 0.07 of its potential returns per unit of risk. Kensington Active Advantage is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 888.00 in Kensington Active Advantage on August 30, 2024 and sell it today you would earn a total of 136.00 from holding Kensington Active Advantage or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kensington Active Advantage vs. Kensington Active Advantage
Performance |
| Timeline |
| Kensington Active |
| Kensington Active |
Kensington Active and Kensington Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kensington Active and Kensington Active
The main advantage of trading using opposite Kensington Active and Kensington Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kensington Active position performs unexpectedly, Kensington Active 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 Kensington Active will offset losses from the drop in Kensington Active's long position.The idea behind Kensington Active Advantage and Kensington Active Advantage 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.
| Kensington Active vs. All Asset Fund | Kensington Active vs. HUMANA INC | Kensington Active vs. Aquagold International | Kensington Active vs. Barloworld Ltd ADR |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |