Correlation Between KIM KINDEX and KIM KINDEX

Can any of the company-specific risk be diversified away by investing in both KIM KINDEX and KIM KINDEX 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 KIM KINDEX and KIM KINDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KIM KINDEX 200 and KIM KINDEX 200TotalReturn, you can compare the effects of market volatilities on KIM KINDEX and KIM KINDEX 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 KIM KINDEX with a short position of KIM KINDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIM KINDEX and KIM KINDEX.

Diversification Opportunities for KIM KINDEX and KIM KINDEX

1.0

Correlation Coefficient

KIM KINDEX  KIM KINDEX

No risk reduction

The 3 months correlation between KIM and KIM is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding KIM KINDEX 200 and KIM KINDEX 200TotalReturn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIM KINDEX 200TotalReturn and KIM KINDEX 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 KIM KINDEX 200 are associated (or correlated) with KIM KINDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIM KINDEX 200TotalReturn has no effect on the direction of KIM KINDEX i.e., KIM KINDEX and KIM KINDEX go up and down completely randomly.

Pair Corralation between KIM KINDEX and KIM KINDEX

Assuming the 90 days trading horizon KIM KINDEX is expected to generate 1.03 times less return on investment than KIM KINDEX. But when comparing it to its historical volatility, KIM KINDEX 200 is 1.01 times less risky than KIM KINDEX. It trades about 0.03 of its potential returns per unit of risk. KIM KINDEX 200TotalReturn is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,881,000  in KIM KINDEX 200TotalReturn on September 25, 2024 and sell it today you would earn a total of  242,000  from holding KIM KINDEX 200TotalReturn or generate 12.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

KIM KINDEX 200  vs.  KIM KINDEX 200TotalReturn

KIM KINDEX 200

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIM KINDEX 200 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KIM KINDEX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

KIM KINDEX 200TotalReturn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIM KINDEX 200TotalReturn has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, KIM KINDEX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KIM KINDEX and KIM KINDEX

The main advantage of trading using opposite KIM KINDEX and KIM KINDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIM KINDEX position performs unexpectedly, KIM KINDEX 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 KIM KINDEX will offset losses from the drop in KIM KINDEX's long position.

The idea behind KIM KINDEX 200 and KIM KINDEX 200TotalReturn 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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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.