Correlation Between Est Global and Kindom Construction

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

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

Diversification Opportunities for Est Global and Kindom Construction

0.81

Correlation Coefficient

Est Global  Kindom Construction

Very poor diversification

The 3 months correlation between Est and Kindom is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Est Global Apparel and Kindom Construction Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kindom Construction Corp and Est Global 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 Est Global Apparel are associated (or correlated) with Kindom Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kindom Construction Corp has no effect on the direction of Est Global i.e., Est Global and Kindom Construction go up and down completely randomly.

Pair Corralation between Est Global and Kindom Construction

Assuming the 90 days trading horizon Est Global is expected to generate 2.25 times less return on investment than Kindom Construction. In addition to that, Est Global is 1.57 times more volatile than Kindom Construction Corp. It trades about 0.05 of its total potential returns per unit of risk. Kindom Construction Corp is currently generating about 0.18 per unit of volatility. If you would invest  5,070  in Kindom Construction Corp on December 22, 2024 and sell it today you would earn a total of  750.00  from holding Kindom Construction Corp or generate 14.79% return on investment over 90 days.

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

Est Global Apparel  vs.  Kindom Construction Corp

Est Global Apparel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Est Global Apparel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Est Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kindom Construction Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kindom Construction Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kindom Construction showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Est Global and Kindom Construction

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

The idea behind Est Global Apparel and Kindom Construction 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.