Correlation Between KGI Securities and Karmarts Public
Can any of the company-specific risk be diversified away by investing in both KGI Securities and Karmarts Public 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 KGI Securities and Karmarts Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KGI Securities Public and Karmarts Public, you can compare the effects of market volatilities on KGI Securities and Karmarts Public 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 KGI Securities with a short position of Karmarts Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and Karmarts Public.
Diversification Opportunities for KGI Securities and Karmarts Public
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KGI and Karmarts is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Karmarts Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karmarts Public and KGI Securities 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 KGI Securities Public are associated (or correlated) with Karmarts Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karmarts Public has no effect on the direction of KGI Securities i.e., KGI Securities and Karmarts Public go up and down completely randomly.
Pair Corralation between KGI Securities and Karmarts Public
Assuming the 90 days trading horizon KGI Securities Public is expected to under-perform the Karmarts Public. But the stock apears to be less risky and, when comparing its historical volatility, KGI Securities Public is 3.88 times less risky than Karmarts Public. The stock trades about 0.0 of its potential returns per unit of risk. The Karmarts Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,032 in Karmarts Public on September 2, 2024 and sell it today you would earn a total of 118.00 from holding Karmarts Public or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KGI Securities Public vs. Karmarts Public
Performance |
| Timeline |
| KGI Securities Public |
| Karmarts Public |
KGI Securities and Karmarts Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KGI Securities and Karmarts Public
The main advantage of trading using opposite KGI Securities and Karmarts Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGI Securities position performs unexpectedly, Karmarts Public 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 Karmarts Public will offset losses from the drop in Karmarts Public's long position.| KGI Securities vs. Turnkey Communication Services | KGI Securities vs. BPS TECHNOLOGY PUBLIC | KGI Securities vs. 2S Metal Public | KGI Securities vs. Information and Communication |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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