Correlation Between Kamino and Ontology
Can any of the company-specific risk be diversified away by investing in both Kamino and Ontology 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 Kamino and Ontology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamino and Ontology, you can compare the effects of market volatilities on Kamino and Ontology 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 Kamino with a short position of Ontology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamino and Ontology.
Diversification Opportunities for Kamino and Ontology
Very weak diversification
The 3 months correlation between Kamino and Ontology is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kamino and Ontology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontology and Kamino 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 Kamino are associated (or correlated) with Ontology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontology has no effect on the direction of Kamino i.e., Kamino and Ontology go up and down completely randomly.
Pair Corralation between Kamino and Ontology
Assuming the 90 days trading horizon Kamino is expected to under-perform the Ontology. In addition to that, Kamino is 1.49 times more volatile than Ontology. It trades about -0.13 of its total potential returns per unit of risk. Ontology is currently generating about -0.17 per unit of volatility. If you would invest 24.00 in Ontology on November 8, 2024 and sell it today you would lose (6.00) from holding Ontology or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamino vs. Ontology
Performance |
| Timeline |
| Kamino |
| Ontology |
Kamino and Ontology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamino and Ontology
The main advantage of trading using opposite Kamino and Ontology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamino position performs unexpectedly, Ontology 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 Ontology will offset losses from the drop in Ontology's long position.The idea behind Kamino and Ontology 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |