Correlation Between Khiron Life and Insteel Industries

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Can any of the company-specific risk be diversified away by investing in both Khiron Life and Insteel Industries 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 Khiron Life and Insteel Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khiron Life Sciences and Insteel Industries, you can compare the effects of market volatilities on Khiron Life and Insteel Industries 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 Khiron Life with a short position of Insteel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khiron Life and Insteel Industries.

Diversification Opportunities for Khiron Life and Insteel Industries

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Khiron and Insteel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Khiron Life Sciences and Insteel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insteel Industries and Khiron Life 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 Khiron Life Sciences are associated (or correlated) with Insteel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insteel Industries has no effect on the direction of Khiron Life i.e., Khiron Life and Insteel Industries go up and down completely randomly.

Pair Corralation between Khiron Life and Insteel Industries

If you would invest  2,623  in Insteel Industries on November 3, 2024 and sell it today you would earn a total of  246.00  from holding Insteel Industries or generate 9.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.0%
ValuesDaily Returns

Khiron Life Sciences  vs.  Insteel Industries

 Performance 
       Timeline  
Khiron Life Sciences 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Khiron Life Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Khiron Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Insteel Industries 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Insteel Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Insteel Industries may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Khiron Life and Insteel Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Khiron Life and Insteel Industries

The main advantage of trading using opposite Khiron Life and Insteel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khiron Life position performs unexpectedly, Insteel Industries 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 Insteel Industries will offset losses from the drop in Insteel Industries' long position.
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The idea behind Khiron Life Sciences and Insteel Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stocks Directory module to find actively traded stocks across global markets.

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