Correlation Between Sika AG and Kraig Biocraft
Can any of the company-specific risk be diversified away by investing in both Sika AG and Kraig Biocraft 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 Sika AG and Kraig Biocraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sika AG ADR and Kraig Biocraft Labs, you can compare the effects of market volatilities on Sika AG and Kraig Biocraft 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 Sika AG with a short position of Kraig Biocraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sika AG and Kraig Biocraft.
Diversification Opportunities for Sika AG and Kraig Biocraft
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sika and Kraig is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sika AG ADR and Kraig Biocraft Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraig Biocraft Labs and Sika AG 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 Sika AG ADR are associated (or correlated) with Kraig Biocraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraig Biocraft Labs has no effect on the direction of Sika AG i.e., Sika AG and Kraig Biocraft go up and down completely randomly.
Pair Corralation between Sika AG and Kraig Biocraft
Assuming the 90 days horizon Sika AG ADR is expected to under-perform the Kraig Biocraft. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sika AG ADR is 3.04 times less risky than Kraig Biocraft. The pink sheet trades about -0.26 of its potential returns per unit of risk. The Kraig Biocraft Labs is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Kraig Biocraft Labs on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Kraig Biocraft Labs or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sika AG ADR vs. Kraig Biocraft Labs
Performance |
| Timeline |
| Sika AG ADR |
| Kraig Biocraft Labs |
Sika AG and Kraig Biocraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sika AG and Kraig Biocraft
The main advantage of trading using opposite Sika AG and Kraig Biocraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sika AG position performs unexpectedly, Kraig Biocraft 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 Kraig Biocraft will offset losses from the drop in Kraig Biocraft's long position.| Sika AG vs. Sherwin Williams Co | Sika AG vs. Air Liquide SA | Sika AG vs. LAir Liquide SA | Sika AG vs. Air Products and |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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