Correlation Between Grupa KTY and Noble Financials
Can any of the company-specific risk be diversified away by investing in both Grupa KTY and Noble Financials 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 Grupa KTY and Noble Financials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupa KTY SA and Noble Financials SA, you can compare the effects of market volatilities on Grupa KTY and Noble Financials 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 Grupa KTY with a short position of Noble Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupa KTY and Noble Financials.
Diversification Opportunities for Grupa KTY and Noble Financials
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grupa and Noble is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Grupa KTY SA and Noble Financials SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Financials and Grupa KTY 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 Grupa KTY SA are associated (or correlated) with Noble Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Financials has no effect on the direction of Grupa KTY i.e., Grupa KTY and Noble Financials go up and down completely randomly.
Pair Corralation between Grupa KTY and Noble Financials
Assuming the 90 days trading horizon Grupa KTY SA is expected to under-perform the Noble Financials. But the stock apears to be less risky and, when comparing its historical volatility, Grupa KTY SA is 1.3 times less risky than Noble Financials. The stock trades about -0.12 of its potential returns per unit of risk. The Noble Financials SA is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 8,980 in Noble Financials SA on September 13, 2024 and sell it today you would lose (800.00) from holding Noble Financials SA or give up 8.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupa KTY SA vs. Noble Financials SA
Performance |
| Timeline |
| Grupa KTY SA |
| Noble Financials |
Grupa KTY and Noble Financials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupa KTY and Noble Financials
The main advantage of trading using opposite Grupa KTY and Noble Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupa KTY position performs unexpectedly, Noble Financials 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 Noble Financials will offset losses from the drop in Noble Financials' long position.| Grupa KTY vs. Noble Financials SA | Grupa KTY vs. Quantum Software SA | Grupa KTY vs. Medicofarma Biotech SA | Grupa KTY vs. Creotech Instruments SA |
| Noble Financials vs. Globe Trade Centre | Noble Financials vs. MLP Group SA | Noble Financials vs. Asseco Business Solutions | Noble Financials vs. Detalion Games SA |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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