Correlation Between Kernel Group and Industrial Tech
Can any of the company-specific risk be diversified away by investing in both Kernel Group and Industrial Tech 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 Kernel Group and Industrial Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kernel Group Holdings and Industrial Tech Acquisitions, you can compare the effects of market volatilities on Kernel Group and Industrial Tech 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 Kernel Group with a short position of Industrial Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kernel Group and Industrial Tech.
Diversification Opportunities for Kernel Group and Industrial Tech
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kernel and Industrial is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kernel Group Holdings and Industrial Tech Acquisitions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Tech Acqu and Kernel Group 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 Kernel Group Holdings are associated (or correlated) with Industrial Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Tech Acqu has no effect on the direction of Kernel Group i.e., Kernel Group and Industrial Tech go up and down completely randomly.
Pair Corralation between Kernel Group and Industrial Tech
Assuming the 90 days horizon Kernel Group is expected to generate 2.09 times less return on investment than Industrial Tech. In addition to that, Kernel Group is 1.14 times more volatile than Industrial Tech Acquisitions. It trades about 0.02 of its total potential returns per unit of risk. Industrial Tech Acquisitions is currently generating about 0.04 per unit of volatility. If you would invest 1,012 in Industrial Tech Acquisitions on August 30, 2024 and sell it today you would earn a total of 73.00 from holding Industrial Tech Acquisitions or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 37.02% |
| Values | Daily Returns |
Kernel Group Holdings vs. Industrial Tech Acquisitions
Performance |
| Timeline |
| Kernel Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Industrial Tech Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kernel Group and Industrial Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kernel Group and Industrial Tech
The main advantage of trading using opposite Kernel Group and Industrial Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kernel Group position performs unexpectedly, Industrial Tech 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 Industrial Tech will offset losses from the drop in Industrial Tech's long position.The idea behind Kernel Group Holdings and Industrial Tech Acquisitions 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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