Correlation Between Keda Clean and Metallurgical

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

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

Diversification Opportunities for Keda Clean and Metallurgical

0.67

Correlation Coefficient

Keda Clean  Metallurgical

Poor diversification

The 3 months correlation between Keda and Metallurgical is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Keda Clean Energy and Metallurgical of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallurgical and Keda Clean 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 Keda Clean Energy are associated (or correlated) with Metallurgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallurgical has no effect on the direction of Keda Clean i.e., Keda Clean and Metallurgical go up and down completely randomly.

Pair Corralation between Keda Clean and Metallurgical

Assuming the 90 days trading horizon Keda Clean Energy is expected to under-perform the Metallurgical. In addition to that, Keda Clean is 1.07 times more volatile than Metallurgical of. It trades about -0.05 of its total potential returns per unit of risk. Metallurgical of is currently generating about 0.02 per unit of volatility. If you would invest  313.00  in Metallurgical of on October 4, 2024 and sell it today you would earn a total of  17.00  from holding Metallurgical of or generate 5.43% return on investment over 90 days.

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

Keda Clean Energy  vs.  Metallurgical of

Keda Clean Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keda Clean Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Metallurgical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Keda Clean and Metallurgical

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

The idea behind Keda Clean Energy and Metallurgical of 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.