Correlation Between KWG Group and Ardelyx
Can any of the company-specific risk be diversified away by investing in both KWG Group and Ardelyx 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 KWG Group and Ardelyx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KWG Group Holdings and Ardelyx, you can compare the effects of market volatilities on KWG Group and Ardelyx 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 KWG Group with a short position of Ardelyx. Check out your portfolio center. Please also check ongoing floating volatility patterns of KWG Group and Ardelyx.
Diversification Opportunities for KWG Group and Ardelyx
Pay attention - limited upside
The 3 months correlation between KWG and Ardelyx is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KWG Group Holdings and Ardelyx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardelyx and KWG 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 KWG Group Holdings are associated (or correlated) with Ardelyx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardelyx has no effect on the direction of KWG Group i.e., KWG Group and Ardelyx go up and down completely randomly.
Pair Corralation between KWG Group and Ardelyx
Assuming the 90 days horizon KWG Group Holdings is expected to under-perform the Ardelyx. But the pink sheet apears to be less risky and, when comparing its historical volatility, KWG Group Holdings is 2.12 times less risky than Ardelyx. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Ardelyx is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 182.00 in Ardelyx on August 29, 2024 and sell it today you would earn a total of 387.00 from holding Ardelyx or generate 212.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KWG Group Holdings vs. Ardelyx
Performance |
| Timeline |
| KWG Group Holdings |
| Ardelyx |
KWG Group and Ardelyx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KWG Group and Ardelyx
The main advantage of trading using opposite KWG Group and Ardelyx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KWG Group position performs unexpectedly, Ardelyx 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 Ardelyx will offset losses from the drop in Ardelyx's long position.| KWG Group vs. Barings BDC | KWG Group vs. Bank of New | KWG Group vs. Franklin Credit Management | KWG Group vs. Univest Pennsylvania |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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