Correlation Between 1875 LGT and 1 KIWIBANK
Can any of the company-specific risk be diversified away by investing in both 1875 LGT and 1 KIWIBANK 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 1875 LGT and 1 KIWIBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1875 LGT BANK and 1 KIWIBANK 20, you can compare the effects of market volatilities on 1875 LGT and 1 KIWIBANK 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 1875 LGT with a short position of 1 KIWIBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1875 LGT and 1 KIWIBANK.
Diversification Opportunities for 1875 LGT and 1 KIWIBANK
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 1875 and KIW13 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 1875 LGT BANK and 1 KIWIBANK 20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1 KIWIBANK 20 and 1875 LGT 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 1875 LGT BANK are associated (or correlated) with 1 KIWIBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1 KIWIBANK 20 has no effect on the direction of 1875 LGT i.e., 1875 LGT and 1 KIWIBANK go up and down completely randomly.
Pair Corralation between 1875 LGT and 1 KIWIBANK
If you would invest (100.00) in 1 KIWIBANK 20 on September 19, 2024 and sell it today you would earn a total of 100.00 from holding 1 KIWIBANK 20 or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1875 LGT BANK vs. 1 KIWIBANK 20
Performance |
| Timeline |
| 1875 LGT BANK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| 1 KIWIBANK 20 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
1875 LGT and 1 KIWIBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1875 LGT and 1 KIWIBANK
The main advantage of trading using opposite 1875 LGT and 1 KIWIBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1875 LGT position performs unexpectedly, 1 KIWIBANK 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 1 KIWIBANK will offset losses from the drop in 1 KIWIBANK's long position.The idea behind 1875 LGT BANK and 1 KIWIBANK 20 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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