Correlation Between Allstar Health and Kiaro Holdings

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

By analyzing existing cross correlation between Allstar Health Brands and Kiaro Holdings Corp, you can compare the effects of market volatilities on Allstar Health and Kiaro Holdings 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 Allstar Health with a short position of Kiaro Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allstar Health and Kiaro Holdings.

Diversification Opportunities for Allstar Health and Kiaro Holdings

0.07

Correlation Coefficient

Allstar Health  Kiaro Holdings

Significant diversification

The 3 months correlation between Allstar and Kiaro is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Allstar Health Brands and Kiaro Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiaro Holdings Corp and Allstar Health 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 Allstar Health Brands are associated (or correlated) with Kiaro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiaro Holdings Corp has no effect on the direction of Allstar Health i.e., Allstar Health and Kiaro Holdings go up and down completely randomly.

Pair Corralation between Allstar Health and Kiaro Holdings

Given the investment horizon of 90 days Allstar Health Brands is expected to generate 0.88 times more return on investment than Kiaro Holdings. However, Allstar Health Brands is 1.14 times less risky than Kiaro Holdings. It trades about 0.0 of its potential returns per unit of risk. Kiaro Holdings Corp is currently generating about -0.13 per unit of risk. If you would invest  0.06  in Allstar Health Brands on December 29, 2024 and sell it today you would lose (0.02) from holding Allstar Health Brands or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Allstar Health Brands  vs.  Kiaro Holdings Corp

Allstar Health Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allstar Health Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Allstar Health is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Kiaro Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kiaro Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Allstar Health and Kiaro Holdings

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

The idea behind Allstar Health Brands and Kiaro Holdings 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.