Correlation Between Khosla Ventures and Metal Sky
Can any of the company-specific risk be diversified away by investing in both Khosla Ventures and Metal Sky 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 Khosla Ventures and Metal Sky into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khosla Ventures Acquisition and Metal Sky Star, you can compare the effects of market volatilities on Khosla Ventures and Metal Sky 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 Khosla Ventures with a short position of Metal Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khosla Ventures and Metal Sky.
Diversification Opportunities for Khosla Ventures and Metal Sky
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Khosla and Metal is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Khosla Ventures Acquisition and Metal Sky Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metal Sky Star and Khosla Ventures 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 Khosla Ventures Acquisition are associated (or correlated) with Metal Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metal Sky Star has no effect on the direction of Khosla Ventures i.e., Khosla Ventures and Metal Sky go up and down completely randomly.
Pair Corralation between Khosla Ventures and Metal Sky
Given the investment horizon of 90 days Khosla Ventures Acquisition is expected to generate 0.49 times more return on investment than Metal Sky. However, Khosla Ventures Acquisition is 2.03 times less risky than Metal Sky. It trades about 0.14 of its potential returns per unit of risk. Metal Sky Star is currently generating about 0.05 per unit of risk. If you would invest 996.00 in Khosla Ventures Acquisition on September 28, 2024 and sell it today you would earn a total of 66.00 from holding Khosla Ventures Acquisition or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 31.3% |
| Values | Daily Returns |
Khosla Ventures Acquisition vs. Metal Sky Star
Performance |
| Timeline |
| Khosla Ventures Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Metal Sky Star |
Khosla Ventures and Metal Sky Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khosla Ventures and Metal Sky
The main advantage of trading using opposite Khosla Ventures and Metal Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khosla Ventures position performs unexpectedly, Metal Sky 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 Metal Sky will offset losses from the drop in Metal Sky's long position.The idea behind Khosla Ventures Acquisition and Metal Sky Star 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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