Correlation Between Kasten and Tanke Biosciences
Can any of the company-specific risk be diversified away by investing in both Kasten and Tanke Biosciences 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 Tanke Biosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasten Inc and Tanke Biosciences, you can compare the effects of market volatilities on Kasten and Tanke Biosciences 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 Tanke Biosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasten and Tanke Biosciences.
Diversification Opportunities for Kasten and Tanke Biosciences
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kasten and Tanke is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kasten Inc and Tanke Biosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanke Biosciences 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 Tanke Biosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanke Biosciences has no effect on the direction of Kasten i.e., Kasten and Tanke Biosciences go up and down completely randomly.
Pair Corralation between Kasten and Tanke Biosciences
Given the investment horizon of 90 days Kasten is expected to generate 2.14 times less return on investment than Tanke Biosciences. But when comparing it to its historical volatility, Kasten Inc is 2.23 times less risky than Tanke Biosciences. It trades about 0.05 of its potential returns per unit of risk. Tanke Biosciences is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Tanke Biosciences on September 1, 2024 and sell it today you would lose (6.24) from holding Tanke Biosciences or give up 89.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kasten Inc vs. Tanke Biosciences
Performance |
| Timeline |
| Kasten Inc |
| Tanke Biosciences |
Kasten and Tanke Biosciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kasten and Tanke Biosciences
The main advantage of trading using opposite Kasten and Tanke Biosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasten position performs unexpectedly, Tanke Biosciences 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 Tanke Biosciences will offset losses from the drop in Tanke Biosciences' long position.| Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent Group |
| Tanke Biosciences vs. C2E Energy | Tanke Biosciences vs. Supurva Healthcare Group | Tanke Biosciences vs. Kasten Inc | Tanke Biosciences vs. CTR Investments Consulting |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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