Correlation Between Kasten and Blockchain Industries
Can any of the company-specific risk be diversified away by investing in both Kasten and Blockchain Industries 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 Blockchain Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasten Inc and Blockchain Industries, you can compare the effects of market volatilities on Kasten and Blockchain Industries 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 Blockchain Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasten and Blockchain Industries.
Diversification Opportunities for Kasten and Blockchain Industries
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kasten and Blockchain is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kasten Inc and Blockchain Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Industries 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 Blockchain Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Industries has no effect on the direction of Kasten i.e., Kasten and Blockchain Industries go up and down completely randomly.
Pair Corralation between Kasten and Blockchain Industries
Given the investment horizon of 90 days Kasten is expected to generate 7.15 times less return on investment than Blockchain Industries. But when comparing it to its historical volatility, Kasten Inc is 1.14 times less risky than Blockchain Industries. It trades about 0.01 of its potential returns per unit of risk. Blockchain Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Blockchain Industries on September 1, 2024 and sell it today you would lose (0.30) from holding Blockchain Industries or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasten Inc vs. Blockchain Industries
Performance |
| Timeline |
| Kasten Inc |
| Blockchain Industries |
Kasten and Blockchain Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasten and Blockchain Industries
The main advantage of trading using opposite Kasten and Blockchain Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasten position performs unexpectedly, Blockchain Industries 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 Blockchain Industries will offset losses from the drop in Blockchain Industries' long position.| Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent Group |
| Blockchain Industries vs. Alpha One | Blockchain Industries vs. Manaris Corp | Blockchain Industries vs. C2E Energy | Blockchain Industries vs. Tanke Biosciences |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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