Correlation Between King Resources and Generation Alpha
Can any of the company-specific risk be diversified away by investing in both King Resources and Generation Alpha 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 King Resources and Generation Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between King Resources and Generation Alpha, you can compare the effects of market volatilities on King Resources and Generation Alpha 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 King Resources with a short position of Generation Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Resources and Generation Alpha.
Diversification Opportunities for King Resources and Generation Alpha
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between King and Generation is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding King Resources and Generation Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Alpha and King Resources 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 King Resources are associated (or correlated) with Generation Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Alpha has no effect on the direction of King Resources i.e., King Resources and Generation Alpha go up and down completely randomly.
Pair Corralation between King Resources and Generation Alpha
Given the investment horizon of 90 days King Resources is expected to generate 1.33 times less return on investment than Generation Alpha. But when comparing it to its historical volatility, King Resources is 2.09 times less risky than Generation Alpha. It trades about 0.11 of its potential returns per unit of risk. Generation Alpha is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Generation Alpha on September 2, 2024 and sell it today you would lose (0.01) from holding Generation Alpha or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Resources vs. Generation Alpha
Performance |
| Timeline |
| King Resources |
| Generation Alpha |
King Resources and Generation Alpha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Resources and Generation Alpha
The main advantage of trading using opposite King Resources and Generation Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Resources position performs unexpectedly, Generation Alpha 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 Generation Alpha will offset losses from the drop in Generation Alpha's long position.| King Resources vs. Generation Alpha | King Resources vs. Dais Analytic Corp | King Resources vs. Polar Power | King Resources vs. Ozop Surgical Corp |
| Generation Alpha vs. King Resources | Generation Alpha vs. Dais Analytic Corp | Generation Alpha vs. Polar Power | Generation Alpha vs. Ozop Surgical Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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