Correlation Between Applied Blockchain and Koss

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

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

Diversification Opportunities for Applied Blockchain and Koss

0.3

Correlation Coefficient

Applied Blockchain  Koss

Weak diversification

The 3 months correlation between Applied and Koss is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Applied Blockchain and Koss Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koss and Applied Blockchain 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 Applied Blockchain are associated (or correlated) with Koss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koss has no effect on the direction of Applied Blockchain i.e., Applied Blockchain and Koss go up and down completely randomly.

Pair Corralation between Applied Blockchain and Koss

Given the investment horizon of 90 days Applied Blockchain is expected to generate 1.02 times more return on investment than Koss. However, Applied Blockchain is 1.02 times more volatile than Koss Corporation. It trades about 0.08 of its potential returns per unit of risk. Koss Corporation is currently generating about 0.04 per unit of risk. If you would invest  183.00  in Applied Blockchain on September 14, 2024 and sell it today you would earn a total of  707.00  from holding Applied Blockchain or generate 386.34% return on investment over 90 days.

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

Applied Blockchain  vs.  Koss Corp.

Applied Blockchain

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Applied Blockchain are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Applied Blockchain exhibited solid returns over the last few months and may actually be approaching a breakup point.

Koss

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Koss Corporation are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Koss is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Applied Blockchain and Koss

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

The idea behind Applied Blockchain and Koss Corporation 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.