Correlation Between KAT Exploration and WarpSpeed Taxi
Can any of the company-specific risk be diversified away by investing in both KAT Exploration and WarpSpeed Taxi 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 WarpSpeed Taxi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAT Exploration and WarpSpeed Taxi, you can compare the effects of market volatilities on KAT Exploration and WarpSpeed Taxi 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 WarpSpeed Taxi. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAT Exploration and WarpSpeed Taxi.
Diversification Opportunities for KAT Exploration and WarpSpeed Taxi
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAT and WarpSpeed is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding KAT Exploration and WarpSpeed Taxi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WarpSpeed Taxi 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 WarpSpeed Taxi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WarpSpeed Taxi has no effect on the direction of KAT Exploration i.e., KAT Exploration and WarpSpeed Taxi go up and down completely randomly.
Pair Corralation between KAT Exploration and WarpSpeed Taxi
Given the investment horizon of 90 days KAT Exploration is expected to generate 1.41 times more return on investment than WarpSpeed Taxi. However, KAT Exploration is 1.41 times more volatile than WarpSpeed Taxi. It trades about 0.08 of its potential returns per unit of risk. WarpSpeed Taxi is currently generating about 0.09 per unit of risk. If you would invest 0.18 in KAT Exploration on September 3, 2024 and sell it today you would lose (0.16) from holding KAT Exploration or give up 88.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAT Exploration vs. WarpSpeed Taxi
Performance |
| Timeline |
| KAT Exploration |
| WarpSpeed Taxi |
KAT Exploration and WarpSpeed Taxi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAT Exploration and WarpSpeed Taxi
The main advantage of trading using opposite KAT Exploration and WarpSpeed Taxi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAT Exploration position performs unexpectedly, WarpSpeed Taxi 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 WarpSpeed Taxi will offset losses from the drop in WarpSpeed Taxi's long position.| KAT Exploration vs. Southern ITS International | KAT Exploration vs. UHF Logistics Group | KAT Exploration vs. Intl Star | KAT Exploration vs. Church Crawford |
| WarpSpeed Taxi vs. Western Asset Global | WarpSpeed Taxi vs. Invesco Trust For | WarpSpeed Taxi vs. Logan Ridge Finance | WarpSpeed Taxi vs. Invesco Advantage MIT |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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