Correlation Between Knight Club and Chamni Eye
Can any of the company-specific risk be diversified away by investing in both Knight Club and Chamni Eye 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 Knight Club and Chamni Eye into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Club Capital and Chamni Eye PCL, you can compare the effects of market volatilities on Knight Club and Chamni Eye 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 Knight Club with a short position of Chamni Eye. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Club and Chamni Eye.
Diversification Opportunities for Knight Club and Chamni Eye
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Knight and Chamni is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Knight Club Capital and Chamni Eye PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chamni Eye PCL and Knight Club 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 Knight Club Capital are associated (or correlated) with Chamni Eye. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chamni Eye PCL has no effect on the direction of Knight Club i.e., Knight Club and Chamni Eye go up and down completely randomly.
Pair Corralation between Knight Club and Chamni Eye
Assuming the 90 days trading horizon Knight Club Capital is expected to under-perform the Chamni Eye. In addition to that, Knight Club is 3.18 times more volatile than Chamni Eye PCL. It trades about -0.04 of its total potential returns per unit of risk. Chamni Eye PCL is currently generating about -0.08 per unit of volatility. If you would invest 431.00 in Chamni Eye PCL on September 12, 2024 and sell it today you would lose (143.00) from holding Chamni Eye PCL or give up 33.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Club Capital vs. Chamni Eye PCL
Performance |
| Timeline |
| Knight Club Capital |
| Chamni Eye PCL |
Knight Club and Chamni Eye Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Club and Chamni Eye
The main advantage of trading using opposite Knight Club and Chamni Eye positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Club position performs unexpectedly, Chamni Eye 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 Chamni Eye will offset losses from the drop in Chamni Eye's long position.| Knight Club vs. Jay Mart Public | Knight Club vs. Bioscience Animal Health | Knight Club vs. KCE Electronics Public | Knight Club vs. Sabuy Technology Public |
| Chamni Eye vs. Bioscience Animal Health | Chamni Eye vs. Bless Asset Group | Chamni Eye vs. CAZ Public | Chamni Eye vs. Bluebik Group PCL |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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