Correlation Between World Kinect and Nasdaq
Can any of the company-specific risk be diversified away by investing in both World Kinect and Nasdaq 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 World Kinect and Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Kinect and Nasdaq Inc, you can compare the effects of market volatilities on World Kinect and Nasdaq 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 World Kinect with a short position of Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Kinect and Nasdaq.
Diversification Opportunities for World Kinect and Nasdaq
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and Nasdaq is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding World Kinect and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc and World Kinect 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 World Kinect are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of World Kinect i.e., World Kinect and Nasdaq go up and down completely randomly.
Pair Corralation between World Kinect and Nasdaq
Considering the 90-day investment horizon World Kinect is expected to generate 1.39 times less return on investment than Nasdaq. In addition to that, World Kinect is 1.64 times more volatile than Nasdaq Inc. It trades about 0.08 of its total potential returns per unit of risk. Nasdaq Inc is currently generating about 0.18 per unit of volatility. If you would invest 6,115 in Nasdaq Inc on September 3, 2024 and sell it today you would earn a total of 2,184 from holding Nasdaq Inc or generate 35.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Kinect vs. Nasdaq Inc
Performance |
| Timeline |
| World Kinect |
| Nasdaq Inc |
World Kinect and Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Kinect and Nasdaq
The main advantage of trading using opposite World Kinect and Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Kinect position performs unexpectedly, Nasdaq 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 Nasdaq will offset losses from the drop in Nasdaq's long position.| World Kinect vs. Nasdaq Inc | World Kinect vs. Stepstone Group | World Kinect vs. Sabra Healthcare REIT | World Kinect vs. Artisan Partners Asset |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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