Correlation Between King Resources and New Generation
Can any of the company-specific risk be diversified away by investing in both King Resources and New Generation 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 New Generation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between King Resources and New Generation Consumer, you can compare the effects of market volatilities on King Resources and New Generation 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 New Generation. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Resources and New Generation.
Diversification Opportunities for King Resources and New Generation
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between King and New is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding King Resources and New Generation Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Generation Consumer 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 New Generation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Generation Consumer has no effect on the direction of King Resources i.e., King Resources and New Generation go up and down completely randomly.
Pair Corralation between King Resources and New Generation
Given the investment horizon of 90 days King Resources is expected to generate 2.57 times more return on investment than New Generation. However, King Resources is 2.57 times more volatile than New Generation Consumer. It trades about 0.19 of its potential returns per unit of risk. New Generation Consumer is currently generating about 0.02 per unit of risk. If you would invest 0.02 in King Resources on September 13, 2024 and sell it today you would earn a total of 0.01 from holding King Resources or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
King Resources vs. New Generation Consumer
Performance |
| Timeline |
| King Resources |
| New Generation Consumer |
King Resources and New Generation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Resources and New Generation
The main advantage of trading using opposite King Resources and New Generation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Resources position performs unexpectedly, New Generation 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 New Generation will offset losses from the drop in New Generation'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 |
| New Generation vs. Green Planet Bio | New Generation vs. Azure Holding Group | New Generation vs. Four Leaf Acquisition | New Generation vs. Opus Magnum Ameris |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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