Correlation Between Kinsus Interconnect and Arcadyan Technology

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

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

Diversification Opportunities for Kinsus Interconnect and Arcadyan Technology

-0.57

Correlation Coefficient

Kinsus Interconnect  Arcadyan Technology

Excellent diversification

The 3 months correlation between Kinsus and Arcadyan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kinsus Interconnect Technology and Arcadyan Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcadyan Technology Corp and Kinsus Interconnect 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 Kinsus Interconnect Technology are associated (or correlated) with Arcadyan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcadyan Technology Corp has no effect on the direction of Kinsus Interconnect i.e., Kinsus Interconnect and Arcadyan Technology go up and down completely randomly.

Pair Corralation between Kinsus Interconnect and Arcadyan Technology

Assuming the 90 days trading horizon Kinsus Interconnect Technology is expected to under-perform the Arcadyan Technology. In addition to that, Kinsus Interconnect is 1.15 times more volatile than Arcadyan Technology Corp. It trades about -0.02 of its total potential returns per unit of risk. Arcadyan Technology Corp is currently generating about 0.15 per unit of volatility. If you would invest  13,950  in Arcadyan Technology Corp on September 17, 2024 and sell it today you would earn a total of  2,850  from holding Arcadyan Technology Corp or generate 20.43% return on investment over 90 days.

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

Kinsus Interconnect Technology  vs.  Arcadyan Technology Corp

Kinsus Interconnect

Risk-Adjusted Performance

0 of 100

Very Weak

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

Arcadyan Technology Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arcadyan Technology Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Arcadyan Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinsus Interconnect and Arcadyan Technology

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

The idea behind Kinsus Interconnect Technology and Arcadyan Technology Corp 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.