Correlation Between AB International and KwikClick

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

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

Diversification Opportunities for AB International and KwikClick

0.06

Correlation Coefficient

AB International  KwikClick

Significant diversification

The 3 months correlation between ABQQ and KwikClick is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding AB International Group and KwikClick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KwikClick and AB International 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 AB International Group are associated (or correlated) with KwikClick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KwikClick has no effect on the direction of AB International i.e., AB International and KwikClick go up and down completely randomly.

Pair Corralation between AB International and KwikClick

Given the investment horizon of 90 days AB International Group is expected to generate 1.36 times more return on investment than KwikClick. However, AB International is 1.36 times more volatile than KwikClick. It trades about 0.12 of its potential returns per unit of risk. KwikClick is currently generating about -0.01 per unit of risk. If you would invest  0.06  in AB International Group on September 11, 2024 and sell it today you would earn a total of  0.03  from holding AB International Group or generate 50.0% return on investment over 90 days.

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

AB International Group  vs.  KwikClick

AB International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AB International Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, AB International reported solid returns over the last few months and may actually be approaching a breakup point.

KwikClick

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KwikClick has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with AB International and KwikClick

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

The idea behind AB International Group and KwikClick 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.