Correlation Between PING and KEY
Can any of the company-specific risk be diversified away by investing in both PING and KEY 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 PING and KEY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PING and KEY, you can compare the effects of market volatilities on PING and KEY 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 PING with a short position of KEY. Check out your portfolio center. Please also check ongoing floating volatility patterns of PING and KEY.
Diversification Opportunities for PING and KEY
Very good diversification
The 3 months correlation between PING and KEY is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PING and KEY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY and PING 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 PING are associated (or correlated) with KEY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY has no effect on the direction of PING i.e., PING and KEY go up and down completely randomly.
Pair Corralation between PING and KEY
If you would invest 0.33 in KEY on August 25, 2024 and sell it today you would earn a total of 0.01 from holding KEY or generate 4.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
PING vs. KEY
Performance |
| Timeline |
| PING |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KEY |
PING and KEY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PING and KEY
The main advantage of trading using opposite PING and KEY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PING position performs unexpectedly, KEY 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 KEY will offset losses from the drop in KEY's long position.The idea behind PING and KEY 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |