Correlation Between Nelnet and KYN Capital
Can any of the company-specific risk be diversified away by investing in both Nelnet and KYN Capital 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 Nelnet and KYN Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nelnet Inc and KYN Capital Group, you can compare the effects of market volatilities on Nelnet and KYN Capital 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 Nelnet with a short position of KYN Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nelnet and KYN Capital.
Diversification Opportunities for Nelnet and KYN Capital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nelnet and KYN is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Nelnet Inc and KYN Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYN Capital Group and Nelnet 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 Nelnet Inc are associated (or correlated) with KYN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYN Capital Group has no effect on the direction of Nelnet i.e., Nelnet and KYN Capital go up and down completely randomly.
Pair Corralation between Nelnet and KYN Capital
Considering the 90-day investment horizon Nelnet Inc is expected to generate 0.34 times more return on investment than KYN Capital. However, Nelnet Inc is 2.93 times less risky than KYN Capital. It trades about -0.07 of its potential returns per unit of risk. KYN Capital Group is currently generating about -0.11 per unit of risk. If you would invest 11,398 in Nelnet Inc on August 30, 2024 and sell it today you would lose (522.00) from holding Nelnet Inc or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nelnet Inc vs. KYN Capital Group
Performance |
| Timeline |
| Nelnet Inc |
| KYN Capital Group |
Nelnet and KYN Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nelnet and KYN Capital
The main advantage of trading using opposite Nelnet and KYN Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nelnet position performs unexpectedly, KYN Capital 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 KYN Capital will offset losses from the drop in KYN Capital's long position.| Nelnet vs. SLM Corp Pb | Nelnet vs. FirstCash | Nelnet vs. Navient Corp | Nelnet vs. Federal Agricultural Mortgage |
| KYN Capital vs. Visa Class A | KYN Capital vs. Mastercard | KYN Capital vs. American Express | KYN Capital vs. PayPal 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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