Correlation Between MTL and Kamino
Can any of the company-specific risk be diversified away by investing in both MTL and Kamino 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 MTL and Kamino into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTL and Kamino, you can compare the effects of market volatilities on MTL and Kamino 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 MTL with a short position of Kamino. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTL and Kamino.
Diversification Opportunities for MTL and Kamino
Very weak diversification
The 3 months correlation between MTL and Kamino is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MTL and Kamino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamino and MTL 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 MTL are associated (or correlated) with Kamino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamino has no effect on the direction of MTL i.e., MTL and Kamino go up and down completely randomly.
Pair Corralation between MTL and Kamino
Assuming the 90 days trading horizon MTL is expected to under-perform the Kamino. But the crypto coin apears to be less risky and, when comparing its historical volatility, MTL is 1.36 times less risky than Kamino. The crypto coin trades about -0.19 of its potential returns per unit of risk. The Kamino is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Kamino on November 8, 2024 and sell it today you would lose (3.98) from holding Kamino or give up 30.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTL vs. Kamino
Performance |
| Timeline |
| MTL |
| Kamino |
MTL and Kamino Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTL and Kamino
The main advantage of trading using opposite MTL and Kamino positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTL position performs unexpectedly, Kamino 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 Kamino will offset losses from the drop in Kamino's long position.The idea behind MTL and Kamino 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |