Correlation Between Mainstreet Equity and KDA
Can any of the company-specific risk be diversified away by investing in both Mainstreet Equity and KDA 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 Mainstreet Equity and KDA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstreet Equity Corp and KDA Group, you can compare the effects of market volatilities on Mainstreet Equity and KDA 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 Mainstreet Equity with a short position of KDA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstreet Equity and KDA.
Diversification Opportunities for Mainstreet Equity and KDA
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mainstreet and KDA is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mainstreet Equity Corp and KDA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDA Group and Mainstreet Equity 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 Mainstreet Equity Corp are associated (or correlated) with KDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDA Group has no effect on the direction of Mainstreet Equity i.e., Mainstreet Equity and KDA go up and down completely randomly.
Pair Corralation between Mainstreet Equity and KDA
Assuming the 90 days trading horizon Mainstreet Equity Corp is expected to under-perform the KDA. But the stock apears to be less risky and, when comparing its historical volatility, Mainstreet Equity Corp is 5.66 times less risky than KDA. The stock trades about -0.17 of its potential returns per unit of risk. The KDA Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 23.00 in KDA Group on September 4, 2024 and sell it today you would earn a total of 5.00 from holding KDA Group or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mainstreet Equity Corp vs. KDA Group
Performance |
| Timeline |
| Mainstreet Equity Corp |
| KDA Group |
Mainstreet Equity and KDA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstreet Equity and KDA
The main advantage of trading using opposite Mainstreet Equity and KDA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstreet Equity position performs unexpectedly, KDA 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 KDA will offset losses from the drop in KDA's long position.| Mainstreet Equity vs. Morguard | Mainstreet Equity vs. Melcor Developments | Mainstreet Equity vs. Boardwalk Real Estate | Mainstreet Equity vs. Genesis Land Development |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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