Correlation Between Bright Kindle and COL Financial

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

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

Diversification Opportunities for Bright Kindle and COL Financial

-0.31

Correlation Coefficient

Bright Kindle  COL Financial

Very good diversification

The 3 months correlation between Bright and COL is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bright Kindle Resources and COL Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COL Financial Group and Bright Kindle 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 Bright Kindle Resources are associated (or correlated) with COL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COL Financial Group has no effect on the direction of Bright Kindle i.e., Bright Kindle and COL Financial go up and down completely randomly.

Pair Corralation between Bright Kindle and COL Financial

Assuming the 90 days trading horizon Bright Kindle Resources is expected to under-perform the COL Financial. In addition to that, Bright Kindle is 1.81 times more volatile than COL Financial Group. It trades about -0.07 of its total potential returns per unit of risk. COL Financial Group is currently generating about -0.03 per unit of volatility. If you would invest  202.00  in COL Financial Group on September 2, 2024 and sell it today you would lose (33.00) from holding COL Financial Group or give up 16.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.02%
Values	Daily Returns

Bright Kindle Resources  vs.  COL Financial Group

Bright Kindle Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bright Kindle Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

COL Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COL Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, COL Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bright Kindle and COL Financial

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

The idea behind Bright Kindle Resources and COL Financial Group 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.