Correlation Between KDA and Quipt Home
Can any of the company-specific risk be diversified away by investing in both KDA and Quipt Home 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 Quipt Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KDA Group and Quipt Home Medical, you can compare the effects of market volatilities on KDA and Quipt Home 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 Quipt Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of KDA and Quipt Home.
Diversification Opportunities for KDA and Quipt Home
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between KDA and Quipt is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding KDA Group and Quipt Home Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quipt Home Medical 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 Quipt Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quipt Home Medical has no effect on the direction of KDA i.e., KDA and Quipt Home go up and down completely randomly.
Pair Corralation between KDA and Quipt Home
Assuming the 90 days horizon KDA Group is expected to generate 1.47 times more return on investment than Quipt Home. However, KDA is 1.47 times more volatile than Quipt Home Medical. It trades about 0.03 of its potential returns per unit of risk. Quipt Home Medical is currently generating about -0.02 per unit of risk. If you would invest 28.00 in KDA Group on September 25, 2024 and sell it today you would earn a total of 1.00 from holding KDA Group or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KDA Group vs. Quipt Home Medical
Performance |
| Timeline |
| KDA Group |
| Quipt Home Medical |
KDA and Quipt Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KDA and Quipt Home
The main advantage of trading using opposite KDA and Quipt Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KDA position performs unexpectedly, Quipt Home 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 Quipt Home will offset losses from the drop in Quipt Home's long position.| KDA vs. Extendicare | KDA vs. Sienna Senior Living | KDA vs. Rogers Sugar | KDA vs. Chemtrade Logistics Income |
| Quipt Home vs. KDA Group | Quipt Home vs. iShares Canadian HYBrid | Quipt Home vs. Altagas Cum Red | Quipt Home vs. European Residential Real |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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