Correlation Between Target Global and Khosla Ventures
Can any of the company-specific risk be diversified away by investing in both Target Global and Khosla Ventures 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 Target Global and Khosla Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Global Acquisition and Khosla Ventures Acquisition, you can compare the effects of market volatilities on Target Global and Khosla Ventures 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 Target Global with a short position of Khosla Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Global and Khosla Ventures.
Diversification Opportunities for Target Global and Khosla Ventures
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Target and Khosla is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Target Global Acquisition and Khosla Ventures Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khosla Ventures Acqu and Target Global 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 Target Global Acquisition are associated (or correlated) with Khosla Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khosla Ventures Acqu has no effect on the direction of Target Global i.e., Target Global and Khosla Ventures go up and down completely randomly.
Pair Corralation between Target Global and Khosla Ventures
Given the investment horizon of 90 days Target Global is expected to generate 1.88 times less return on investment than Khosla Ventures. In addition to that, Target Global is 1.13 times more volatile than Khosla Ventures Acquisition. It trades about 0.06 of its total potential returns per unit of risk. Khosla Ventures Acquisition is currently generating about 0.14 per unit of volatility. If you would invest 996.00 in Khosla Ventures Acquisition on September 28, 2024 and sell it today you would earn a total of 66.00 from holding Khosla Ventures Acquisition or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.3% |
| Values | Daily Returns |
Target Global Acquisition vs. Khosla Ventures Acquisition
Performance |
| Timeline |
| Target Global Acquisition |
| Khosla Ventures Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Target Global and Khosla Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target Global and Khosla Ventures
The main advantage of trading using opposite Target Global and Khosla Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Global position performs unexpectedly, Khosla Ventures 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 Khosla Ventures will offset losses from the drop in Khosla Ventures' long position.| Target Global vs. Aquagold International | Target Global vs. Morningstar Unconstrained Allocation | Target Global vs. Thrivent High Yield | Target Global vs. Via Renewables |
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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