Correlation Between 1 KIWIBANK and 1875 LGT
Can any of the company-specific risk be diversified away by investing in both 1 KIWIBANK and 1875 LGT 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 1 KIWIBANK and 1875 LGT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1 KIWIBANK 20 and 1875 LGT BANK, you can compare the effects of market volatilities on 1 KIWIBANK and 1875 LGT 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 1 KIWIBANK with a short position of 1875 LGT. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1 KIWIBANK and 1875 LGT.
Diversification Opportunities for 1 KIWIBANK and 1875 LGT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KIW13 and 1875 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 1 KIWIBANK 20 and 1875 LGT BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1875 LGT BANK and 1 KIWIBANK 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 1 KIWIBANK 20 are associated (or correlated) with 1875 LGT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1875 LGT BANK has no effect on the direction of 1 KIWIBANK i.e., 1 KIWIBANK and 1875 LGT go up and down completely randomly.
Pair Corralation between 1 KIWIBANK and 1875 LGT
If you would invest (100.00) in 1875 LGT BANK on September 19, 2024 and sell it today you would earn a total of 100.00 from holding 1875 LGT BANK or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1 KIWIBANK 20 vs. 1875 LGT BANK
Performance |
| Timeline |
| 1 KIWIBANK 20 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| 1875 LGT BANK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
1 KIWIBANK and 1875 LGT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1 KIWIBANK and 1875 LGT
The main advantage of trading using opposite 1 KIWIBANK and 1875 LGT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1 KIWIBANK position performs unexpectedly, 1875 LGT 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 1875 LGT will offset losses from the drop in 1875 LGT's long position.The idea behind 1 KIWIBANK 20 and 1875 LGT BANK 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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