Correlation Between Kko International and Deezer SA

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

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

Diversification Opportunities for Kko International and Deezer SA

-0.77

Correlation Coefficient

Kko International  Deezer SA

Pay attention - limited upside

The 3 months correlation between Kko and Deezer is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kko International SA and Deezer SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deezer SA and Kko 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 Kko International SA are associated (or correlated) with Deezer SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deezer SA has no effect on the direction of Kko International i.e., Kko International and Deezer SA go up and down completely randomly.

Pair Corralation between Kko International and Deezer SA

Assuming the 90 days trading horizon Kko International SA is expected to generate 5.13 times more return on investment than Deezer SA. However, Kko International is 5.13 times more volatile than Deezer SA. It trades about 0.21 of its potential returns per unit of risk. Deezer SA is currently generating about -0.08 per unit of risk. If you would invest  4.06  in Kko International SA on October 15, 2024 and sell it today you would earn a total of  11.94  from holding Kko International SA or generate 294.09% return on investment over 90 days.

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

Kko International SA  vs.  Deezer SA

Kko International

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kko International SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kko International reported solid returns over the last few months and may actually be approaching a breakup point.

Deezer SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deezer SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Kko International and Deezer SA

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

The idea behind Kko International SA and Deezer SA 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.