Correlation Between KDA and Maxim Power
Can any of the company-specific risk be diversified away by investing in both KDA and Maxim Power 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 Maxim Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KDA Group and Maxim Power Corp, you can compare the effects of market volatilities on KDA and Maxim Power 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 Maxim Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of KDA and Maxim Power.
Diversification Opportunities for KDA and Maxim Power
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KDA and Maxim is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding KDA Group and Maxim Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maxim Power Corp 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 Maxim Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maxim Power Corp has no effect on the direction of KDA i.e., KDA and Maxim Power go up and down completely randomly.
Pair Corralation between KDA and Maxim Power
Assuming the 90 days horizon KDA is expected to generate 4.66 times less return on investment than Maxim Power. In addition to that, KDA is 1.87 times more volatile than Maxim Power Corp. It trades about 0.04 of its total potential returns per unit of risk. Maxim Power Corp is currently generating about 0.31 per unit of volatility. If you would invest 379.00 in Maxim Power Corp on August 28, 2024 and sell it today you would earn a total of 106.00 from holding Maxim Power Corp or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KDA Group vs. Maxim Power Corp
Performance |
| Timeline |
| KDA Group |
| Maxim Power Corp |
KDA and Maxim Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KDA and Maxim Power
The main advantage of trading using opposite KDA and Maxim Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KDA position performs unexpectedly, Maxim Power 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 Maxim Power will offset losses from the drop in Maxim Power's long position.| KDA vs. Atrium Mortgage Investment | KDA vs. Primaris Retail RE | KDA vs. Medical Facilities | KDA vs. Highwood Asset Management |
| Maxim Power vs. Caldwell Partners International | Maxim Power vs. Chesswood Group Limited | Maxim Power vs. Mccoy Global | Maxim Power vs. Pulse Seismic |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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