Correlation Between KIN and Aptos
Can any of the company-specific risk be diversified away by investing in both KIN and Aptos 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 KIN and Aptos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIN and Aptos, you can compare the effects of market volatilities on KIN and Aptos 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 KIN with a short position of Aptos. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIN and Aptos.
Diversification Opportunities for KIN and Aptos
Pay attention - limited upside
The 3 months correlation between KIN and Aptos is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding KIN and Aptos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptos and KIN 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 KIN are associated (or correlated) with Aptos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptos has no effect on the direction of KIN i.e., KIN and Aptos go up and down completely randomly.
Pair Corralation between KIN and Aptos
Assuming the 90 days trading horizon KIN is expected to generate 3.9 times less return on investment than Aptos. In addition to that, KIN is 1.23 times more volatile than Aptos. It trades about 0.09 of its total potential returns per unit of risk. Aptos is currently generating about 0.43 per unit of volatility. If you would invest 846.00 in Aptos on September 4, 2024 and sell it today you would earn a total of 542.00 from holding Aptos or generate 64.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIN vs. Aptos
Performance |
| Timeline |
| KIN |
| Aptos |
KIN and Aptos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIN and Aptos
The main advantage of trading using opposite KIN and Aptos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIN position performs unexpectedly, Aptos 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 Aptos will offset losses from the drop in Aptos' long position.The idea behind KIN and Aptos 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.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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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