Correlation Between KDA and IShares Fundamental
Can any of the company-specific risk be diversified away by investing in both KDA and IShares Fundamental 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 KDA and IShares Fundamental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KDA Group and iShares Fundamental Hedged, you can compare the effects of market volatilities on KDA and IShares Fundamental 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 KDA with a short position of IShares Fundamental. Check out your portfolio center. Please also check ongoing floating volatility patterns of KDA and IShares Fundamental.
Diversification Opportunities for KDA and IShares Fundamental
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KDA and IShares is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KDA Group and iShares Fundamental Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Fundamental and KDA 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 KDA Group are associated (or correlated) with IShares Fundamental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Fundamental has no effect on the direction of KDA i.e., KDA and IShares Fundamental go up and down completely randomly.
Pair Corralation between KDA and IShares Fundamental
Assuming the 90 days horizon KDA Group is expected to under-perform the IShares Fundamental. In addition to that, KDA is 7.63 times more volatile than iShares Fundamental Hedged. It trades about -0.04 of its total potential returns per unit of risk. iShares Fundamental Hedged is currently generating about 0.28 per unit of volatility. If you would invest 5,355 in iShares Fundamental Hedged on October 20, 2024 and sell it today you would earn a total of 207.00 from holding iShares Fundamental Hedged or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KDA Group vs. iShares Fundamental Hedged
Performance |
| Timeline |
| KDA Group |
| iShares Fundamental |
KDA and IShares Fundamental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KDA and IShares Fundamental
The main advantage of trading using opposite KDA and IShares Fundamental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KDA position performs unexpectedly, IShares Fundamental 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 IShares Fundamental will offset losses from the drop in IShares Fundamental's long position.| KDA vs. Western Investment | KDA vs. Postmedia Network Canada | KDA vs. Brookfield Investments | KDA vs. Upstart Investments |
| IShares Fundamental vs. iShares Convertible Bond | IShares Fundamental vs. iShares SP Mid Cap | IShares Fundamental vs. iShares Edge MSCI | IShares Fundamental vs. iShares Flexible Monthly |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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