Correlation Between PING and KMD
Can any of the company-specific risk be diversified away by investing in both PING and KMD 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 KMD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PING and KMD, you can compare the effects of market volatilities on PING and KMD 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 KMD. Check out your portfolio center. Please also check ongoing floating volatility patterns of PING and KMD.
Diversification Opportunities for PING and KMD
Pay attention - limited upside
The 3 months correlation between PING and KMD is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PING and KMD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMD 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 KMD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMD has no effect on the direction of PING i.e., PING and KMD go up and down completely randomly.
Pair Corralation between PING and KMD
If you would invest (100.00) in PING on November 8, 2024 and sell it today you would earn a total of 100.00 from holding PING or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
PING vs. KMD
Performance |
| Timeline |
| PING |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KMD |
PING and KMD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PING and KMD
The main advantage of trading using opposite PING and KMD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PING position performs unexpectedly, KMD 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 KMD will offset losses from the drop in KMD's long position.The idea behind PING and KMD 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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