Correlation Between KAT Exploration and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both KAT Exploration and Advantage Solutions 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 KAT Exploration and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAT Exploration and Advantage Solutions, you can compare the effects of market volatilities on KAT Exploration and Advantage Solutions 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 KAT Exploration with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAT Exploration and Advantage Solutions.
Diversification Opportunities for KAT Exploration and Advantage Solutions
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between KAT and Advantage is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KAT Exploration and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and KAT Exploration 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 KAT Exploration are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of KAT Exploration i.e., KAT Exploration and Advantage Solutions go up and down completely randomly.
Pair Corralation between KAT Exploration and Advantage Solutions
Given the investment horizon of 90 days KAT Exploration is not expected to generate positive returns. Moreover, KAT Exploration is 1.56 times more volatile than Advantage Solutions. It trades away all of its potential returns to assume current level of volatility. Advantage Solutions is currently generating about 0.0 per unit of risk. If you would invest 0.03 in KAT Exploration on September 5, 2024 and sell it today you would lose (0.01) from holding KAT Exploration or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
KAT Exploration vs. Advantage Solutions
Performance |
| Timeline |
| KAT Exploration |
| Advantage Solutions |
KAT Exploration and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAT Exploration and Advantage Solutions
The main advantage of trading using opposite KAT Exploration and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAT Exploration position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.| KAT Exploration vs. Advantage Solutions | KAT Exploration vs. Atlas Corp | KAT Exploration vs. PureCycle Technologies | KAT Exploration vs. WM Technology |
| Advantage Solutions vs. CannBioRx Life Sciences | Advantage Solutions vs. GCM Grosvenor | Advantage Solutions vs. CuriosityStream |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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