Correlation Between KIM KINDEX and 456680

Can any of the company-specific risk be diversified away by investing in both KIM KINDEX and 456680 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 456680 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KIM KINDEX 200TotalReturn and 456680, you can compare the effects of market volatilities on KIM KINDEX and 456680 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 456680. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIM KINDEX and 456680.

Diversification Opportunities for KIM KINDEX and 456680

-0.45

Correlation Coefficient

KIM KINDEX  456680

Very good diversification

The 3 months correlation between KIM and 456680 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding KIM KINDEX 200TotalReturn and 456680 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 456680 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 200TotalReturn are associated (or correlated) with 456680. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 456680 has no effect on the direction of KIM KINDEX i.e., KIM KINDEX and 456680 go up and down completely randomly.

Pair Corralation between KIM KINDEX and 456680

Assuming the 90 days trading horizon KIM KINDEX 200TotalReturn is expected to under-perform the 456680. But the etf apears to be less risky and, when comparing its historical volatility, KIM KINDEX 200TotalReturn is 1.61 times less risky than 456680. The etf trades about -0.13 of its potential returns per unit of risk. The 456680 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  593,000  in 456680 on September 25, 2024 and sell it today you would earn a total of  7,500  from holding 456680 or generate 1.26% return on investment over 90 days.

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

KIM KINDEX 200TotalReturn  vs.  456680

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.

456680

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 456680 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 456680 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KIM KINDEX and 456680

The main advantage of trading using opposite KIM KINDEX and 456680 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIM KINDEX position performs unexpectedly, 456680 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 456680 will offset losses from the drop in 456680's long position.

The idea behind KIM KINDEX 200TotalReturn and 456680 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.