Correlation Between Itafos and KS AG
Can any of the company-specific risk be diversified away by investing in both Itafos and KS AG 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 Itafos and KS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itafos Inc and KS AG DRC, you can compare the effects of market volatilities on Itafos and KS AG 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 Itafos with a short position of KS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itafos and KS AG.
Diversification Opportunities for Itafos and KS AG
Good diversification
The 3 months correlation between Itafos and KPLUY is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Itafos Inc and KS AG DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KS AG DRC and Itafos 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 Itafos Inc are associated (or correlated) with KS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KS AG DRC has no effect on the direction of Itafos i.e., Itafos and KS AG go up and down completely randomly.
Pair Corralation between Itafos and KS AG
Given the investment horizon of 90 days Itafos Inc is expected to generate 0.75 times more return on investment than KS AG. However, Itafos Inc is 1.34 times less risky than KS AG. It trades about 0.04 of its potential returns per unit of risk. KS AG DRC is currently generating about -0.02 per unit of risk. If you would invest 116.00 in Itafos Inc on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Itafos Inc or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Itafos Inc vs. KS AG DRC
Performance |
| Timeline |
| Itafos Inc |
| KS AG DRC |
Itafos and KS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itafos and KS AG
The main advantage of trading using opposite Itafos and KS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itafos position performs unexpectedly, KS AG 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 KS AG will offset losses from the drop in KS AG's long position.| Itafos vs. Danakali | Itafos vs. Intrepid Potash | Itafos vs. Verde Agritech | Itafos vs. Yara International ASA |
| KS AG vs. Yara International ASA | KS AG vs. Boswell J G | KS AG vs. ICL Israel Chemicals | KS AG vs. CF Industries Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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