Correlation Between City National and Kngt Clb
Can any of the company-specific risk be diversified away by investing in both City National and Kngt Clb 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 City National and Kngt Clb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Kngt Clb Eqy, you can compare the effects of market volatilities on City National and Kngt Clb 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 City National with a short position of Kngt Clb. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Kngt Clb.
Diversification Opportunities for City National and Kngt Clb
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between City and Kngt is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Kngt Clb Eqy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kngt Clb Eqy and City National 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 City National Rochdale are associated (or correlated) with Kngt Clb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kngt Clb Eqy has no effect on the direction of City National i.e., City National and Kngt Clb go up and down completely randomly.
Pair Corralation between City National and Kngt Clb
Assuming the 90 days horizon City National is expected to generate 1.54 times less return on investment than Kngt Clb. But when comparing it to its historical volatility, City National Rochdale is 5.93 times less risky than Kngt Clb. It trades about 0.31 of its potential returns per unit of risk. Kngt Clb Eqy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,105 in Kngt Clb Eqy on September 14, 2024 and sell it today you would earn a total of 173.00 from holding Kngt Clb Eqy or generate 15.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Kngt Clb Eqy
Performance |
| Timeline |
| City National Rochdale |
| Kngt Clb Eqy |
City National and Kngt Clb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Kngt Clb
The main advantage of trading using opposite City National and Kngt Clb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Kngt Clb 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 Kngt Clb will offset losses from the drop in Kngt Clb's long position.| City National vs. Columbia Global Technology | City National vs. Vanguard Information Technology | City National vs. Icon Information Technology | City National vs. Science Technology Fund |
| Kngt Clb vs. City National Rochdale | Kngt Clb vs. Jpmorgan High Yield | Kngt Clb vs. Blackrock High Yield | Kngt Clb vs. Janus High Yield Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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