Correlation Between Oak Woods and Kingswood Acquisition
Can any of the company-specific risk be diversified away by investing in both Oak Woods and Kingswood Acquisition 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 Oak Woods and Kingswood Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oak Woods Acquisition and Kingswood Acquisition Corp, you can compare the effects of market volatilities on Oak Woods and Kingswood Acquisition 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 Oak Woods with a short position of Kingswood Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oak Woods and Kingswood Acquisition.
Diversification Opportunities for Oak Woods and Kingswood Acquisition
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oak and Kingswood is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and Kingswood Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingswood Acquisition and Oak Woods 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 Oak Woods Acquisition are associated (or correlated) with Kingswood Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingswood Acquisition has no effect on the direction of Oak Woods i.e., Oak Woods and Kingswood Acquisition go up and down completely randomly.
Pair Corralation between Oak Woods and Kingswood Acquisition
Assuming the 90 days horizon Oak Woods is expected to generate 1809.91 times less return on investment than Kingswood Acquisition. But when comparing it to its historical volatility, Oak Woods Acquisition is 298.39 times less risky than Kingswood Acquisition. It trades about 0.04 of its potential returns per unit of risk. Kingswood Acquisition Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1.30 in Kingswood Acquisition Corp on September 1, 2024 and sell it today you would lose (0.48) from holding Kingswood Acquisition Corp or give up 36.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 2.69% |
| Values | Daily Returns |
Oak Woods Acquisition vs. Kingswood Acquisition Corp
Performance |
| Timeline |
| Oak Woods Acquisition |
| Kingswood Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Oak Woods and Kingswood Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oak Woods and Kingswood Acquisition
The main advantage of trading using opposite Oak Woods and Kingswood Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods position performs unexpectedly, Kingswood Acquisition 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 Kingswood Acquisition will offset losses from the drop in Kingswood Acquisition's long position.| Oak Woods vs. Avient Corp | Oak Woods vs. Minerals Technologies | Oak Woods vs. Eldorado Gold Corp | Oak Woods vs. Evolution Gaming Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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