Correlation Between Schweizerische Nationalbank and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Schweizerische Nationalbank and Kelt Exploration 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 Schweizerische Nationalbank and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schweizerische Nationalbank and Kelt Exploration, you can compare the effects of market volatilities on Schweizerische Nationalbank and Kelt Exploration 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 Schweizerische Nationalbank with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schweizerische Nationalbank and Kelt Exploration.
Diversification Opportunities for Schweizerische Nationalbank and Kelt Exploration
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schweizerische and Kelt is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Schweizerische Nationalbank and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Schweizerische Nationalbank 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 Schweizerische Nationalbank are associated (or correlated) with Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Schweizerische Nationalbank i.e., Schweizerische Nationalbank and Kelt Exploration go up and down completely randomly.
Pair Corralation between Schweizerische Nationalbank and Kelt Exploration
Assuming the 90 days horizon Schweizerische Nationalbank is expected to under-perform the Kelt Exploration. But the pink sheet apears to be less risky and, when comparing its historical volatility, Schweizerische Nationalbank is 1.42 times less risky than Kelt Exploration. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Kelt Exploration is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 376.00 in Kelt Exploration on September 13, 2024 and sell it today you would earn a total of 87.00 from holding Kelt Exploration or generate 23.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schweizerische Nationalbank vs. Kelt Exploration
Performance |
| Timeline |
| Schweizerische Nationalbank |
| Kelt Exploration |
Schweizerische Nationalbank and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schweizerische Nationalbank and Kelt Exploration
The main advantage of trading using opposite Schweizerische Nationalbank and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schweizerische Nationalbank position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.The idea behind Schweizerische Nationalbank and Kelt Exploration 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.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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