Correlation Between KAT Exploration and Theglobe
Can any of the company-specific risk be diversified away by investing in both KAT Exploration and Theglobe 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 Theglobe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAT Exploration and theglobe, you can compare the effects of market volatilities on KAT Exploration and Theglobe 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 Theglobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAT Exploration and Theglobe.
Diversification Opportunities for KAT Exploration and Theglobe
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KAT and Theglobe is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding KAT Exploration and theglobe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on theglobe 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 Theglobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of theglobe has no effect on the direction of KAT Exploration i.e., KAT Exploration and Theglobe go up and down completely randomly.
Pair Corralation between KAT Exploration and Theglobe
If you would invest 0.04 in KAT Exploration on August 30, 2024 and sell it today you would lose (0.02) from holding KAT Exploration or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.27% |
| Values | Daily Returns |
KAT Exploration vs. theglobe
Performance |
| Timeline |
| KAT Exploration |
| theglobe |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KAT Exploration and Theglobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAT Exploration and Theglobe
The main advantage of trading using opposite KAT Exploration and Theglobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAT Exploration position performs unexpectedly, Theglobe 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 Theglobe will offset losses from the drop in Theglobe's long position.| KAT Exploration vs. Silver Hammer Mining | KAT Exploration vs. Reyna Silver Corp | KAT Exploration vs. Guanajuato Silver | KAT Exploration vs. Silver One Resources |
| Theglobe vs. Blockchain Industries | Theglobe vs. Plandai Biotech | Theglobe vs. KAT Exploration | Theglobe vs. A1 Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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