Correlation Between Kneomedia and Midway
Can any of the company-specific risk be diversified away by investing in both Kneomedia and Midway 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 Kneomedia and Midway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kneomedia and Midway, you can compare the effects of market volatilities on Kneomedia and Midway 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 Kneomedia with a short position of Midway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kneomedia and Midway.
Diversification Opportunities for Kneomedia and Midway
Pay attention - limited upside
The 3 months correlation between Kneomedia and Midway is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kneomedia and Midway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midway and Kneomedia 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 Kneomedia are associated (or correlated) with Midway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midway has no effect on the direction of Kneomedia i.e., Kneomedia and Midway go up and down completely randomly.
Pair Corralation between Kneomedia and Midway
Assuming the 90 days trading horizon Kneomedia is expected to generate 1.1 times less return on investment than Midway. In addition to that, Kneomedia is 2.22 times more volatile than Midway. It trades about 0.02 of its total potential returns per unit of risk. Midway is currently generating about 0.06 per unit of volatility. If you would invest 65.00 in Midway on September 4, 2024 and sell it today you would earn a total of 60.00 from holding Midway or generate 92.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Kneomedia vs. Midway
Performance |
| Timeline |
| Kneomedia |
| Midway |
Kneomedia and Midway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kneomedia and Midway
The main advantage of trading using opposite Kneomedia and Midway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kneomedia position performs unexpectedly, Midway 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 Midway will offset losses from the drop in Midway's long position.The idea behind Kneomedia and Midway 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.| Midway vs. Microequities Asset Management | Midway vs. Australian Agricultural | Midway vs. Platinum Asset Management | Midway vs. Magellan Financial Group |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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