Correlation Between NYSE Composite and Kasten
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kasten 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 NYSE Composite and Kasten into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kasten Inc, you can compare the effects of market volatilities on NYSE Composite and Kasten 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 NYSE Composite with a short position of Kasten. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kasten.
Diversification Opportunities for NYSE Composite and Kasten
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Kasten is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kasten Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasten Inc and NYSE Composite 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 NYSE Composite are associated (or correlated) with Kasten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasten Inc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kasten go up and down completely randomly.
Pair Corralation between NYSE Composite and Kasten
Assuming the 90 days trading horizon NYSE Composite is expected to generate 15.67 times less return on investment than Kasten. But when comparing it to its historical volatility, NYSE Composite is 22.31 times less risky than Kasten. It trades about 0.08 of its potential returns per unit of risk. Kasten Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2.71 in Kasten Inc on September 3, 2024 and sell it today you would lose (2.11) from holding Kasten Inc or give up 77.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NYSE Composite vs. Kasten Inc
Performance |
| Timeline |
NYSE Composite and Kasten Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kasten Inc
Pair trading matchups for Kasten
Pair Trading with NYSE Composite and Kasten
The main advantage of trading using opposite NYSE Composite and Kasten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kasten 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 Kasten will offset losses from the drop in Kasten's long position.| NYSE Composite vs. Lindblad Expeditions Holdings | NYSE Composite vs. LB Foster | NYSE Composite vs. HUTCHMED DRC | NYSE Composite vs. Bridgford Foods |
| Kasten vs. Manaris Corp | Kasten vs. Green Planet Bio | Kasten vs. Continental Beverage Brands | Kasten vs. Opus Magnum Ameris |
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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