Correlation Between KAT Exploration and Blueriver Acquisition
Can any of the company-specific risk be diversified away by investing in both KAT Exploration and Blueriver Acquisition 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 Blueriver Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAT Exploration and Blueriver Acquisition Corp, you can compare the effects of market volatilities on KAT Exploration and Blueriver Acquisition 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 Blueriver Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAT Exploration and Blueriver Acquisition.
Diversification Opportunities for KAT Exploration and Blueriver Acquisition
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KAT and Blueriver is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding KAT Exploration and Blueriver Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blueriver Acquisition 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 Blueriver Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blueriver Acquisition has no effect on the direction of KAT Exploration i.e., KAT Exploration and Blueriver Acquisition go up and down completely randomly.
Pair Corralation between KAT Exploration and Blueriver Acquisition
Given the investment horizon of 90 days KAT Exploration is expected to generate 213.5 times more return on investment than Blueriver Acquisition. However, KAT Exploration is 213.5 times more volatile than Blueriver Acquisition Corp. It trades about 0.1 of its potential returns per unit of risk. Blueriver Acquisition Corp is currently generating about -0.02 per unit of risk. If you would invest 0.07 in KAT Exploration on September 12, 2024 and sell it today you would lose (0.04) from holding KAT Exploration or give up 57.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.94% |
| Values | Daily Returns |
KAT Exploration vs. Blueriver Acquisition Corp
Performance |
| Timeline |
| KAT Exploration |
| Blueriver Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KAT Exploration and Blueriver Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAT Exploration and Blueriver Acquisition
The main advantage of trading using opposite KAT Exploration and Blueriver Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAT Exploration position performs unexpectedly, Blueriver Acquisition 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 Blueriver Acquisition will offset losses from the drop in Blueriver Acquisition's long position.| KAT Exploration vs. Advantage Solutions | KAT Exploration vs. Atlas Corp | KAT Exploration vs. PureCycle Technologies | KAT Exploration vs. WM Technology |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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