Correlation Between Trans Global and KYN Capital
Can any of the company-specific risk be diversified away by investing in both Trans Global and KYN Capital 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 Trans Global and KYN Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trans Global Grp and KYN Capital Group, you can compare the effects of market volatilities on Trans Global and KYN Capital 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 Trans Global with a short position of KYN Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trans Global and KYN Capital.
Diversification Opportunities for Trans Global and KYN Capital
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trans and KYN is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Trans Global Grp and KYN Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYN Capital Group and Trans 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 Trans Global Grp are associated (or correlated) with KYN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYN Capital Group has no effect on the direction of Trans Global i.e., Trans Global and KYN Capital go up and down completely randomly.
Pair Corralation between Trans Global and KYN Capital
Given the investment horizon of 90 days Trans Global Grp is expected to generate 3.85 times more return on investment than KYN Capital. However, Trans Global is 3.85 times more volatile than KYN Capital Group. It trades about 0.13 of its potential returns per unit of risk. KYN Capital Group is currently generating about 0.02 per unit of risk. If you would invest 0.04 in Trans Global Grp on August 31, 2024 and sell it today you would lose (0.03) from holding Trans Global Grp or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Trans Global Grp vs. KYN Capital Group
Performance |
| Timeline |
| Trans Global Grp |
| KYN Capital Group |
Trans Global and KYN Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trans Global and KYN Capital
The main advantage of trading using opposite Trans Global and KYN Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trans Global position performs unexpectedly, KYN Capital 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 KYN Capital will offset losses from the drop in KYN Capital's long position.| Trans Global vs. American Leisure Holdings | Trans Global vs. Supurva Healthcare Group | Trans Global vs. China Health Management | Trans Global vs. Embrace Change Acquisition |
| KYN Capital vs. Visa Class A | KYN Capital vs. Mastercard | KYN Capital vs. American Express | KYN Capital vs. PayPal Holdings |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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