Correlation Between KYE Systems and Shuttle

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

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

Diversification Opportunities for KYE Systems and Shuttle

0.45

Correlation Coefficient

KYE Systems  Shuttle

Very weak diversification

The 3 months correlation between KYE and Shuttle is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KYE Systems Corp and Shuttle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuttle and KYE Systems 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 KYE Systems Corp are associated (or correlated) with Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuttle has no effect on the direction of KYE Systems i.e., KYE Systems and Shuttle go up and down completely randomly.

Pair Corralation between KYE Systems and Shuttle

Assuming the 90 days trading horizon KYE Systems Corp is expected to under-perform the Shuttle. In addition to that, KYE Systems is 1.58 times more volatile than Shuttle. It trades about -0.29 of its total potential returns per unit of risk. Shuttle is currently generating about -0.27 per unit of volatility. If you would invest  2,120  in Shuttle on October 23, 2024 and sell it today you would lose (195.00) from holding Shuttle or give up 9.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

KYE Systems Corp  vs.  Shuttle

KYE Systems Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KYE Systems Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Shuttle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shuttle has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Shuttle is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with KYE Systems and Shuttle

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

The idea behind KYE Systems Corp and Shuttle 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.