Correlation Between Kasten and Alpha One
Can any of the company-specific risk be diversified away by investing in both Kasten and Alpha One 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 Kasten and Alpha One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasten Inc and Alpha One, you can compare the effects of market volatilities on Kasten and Alpha One 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 Kasten with a short position of Alpha One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasten and Alpha One.
Diversification Opportunities for Kasten and Alpha One
Pay attention - limited upside
The 3 months correlation between Kasten and Alpha is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kasten Inc and Alpha One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha One and Kasten 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 Kasten Inc are associated (or correlated) with Alpha One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha One has no effect on the direction of Kasten i.e., Kasten and Alpha One go up and down completely randomly.
Pair Corralation between Kasten and Alpha One
Given the investment horizon of 90 days Kasten Inc is expected to generate 2.64 times more return on investment than Alpha One. However, Kasten is 2.64 times more volatile than Alpha One. It trades about 0.05 of its potential returns per unit of risk. Alpha One is currently generating about 0.03 per unit of risk. If you would invest 2.71 in Kasten Inc on September 3, 2024 and sell it today you would lose (2.11) from holding Kasten Inc or give up 77.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasten Inc vs. Alpha One
Performance |
| Timeline |
| Kasten Inc |
| Alpha One |
Kasten and Alpha One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasten and Alpha One
The main advantage of trading using opposite Kasten and Alpha One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasten position performs unexpectedly, Alpha One 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 Alpha One will offset losses from the drop in Alpha One's long position.| Kasten vs. Manaris Corp | Kasten vs. Green Planet Bio | Kasten vs. Continental Beverage Brands | Kasten vs. Opus Magnum Ameris |
| Alpha One vs. Manaris Corp | Alpha One vs. Green Planet Bio | Alpha One vs. Continental Beverage Brands | Alpha One vs. Opus Magnum Ameris |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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