Correlation Between Captivision Ordinary and AKITA Drilling

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

By analyzing existing cross correlation between Captivision Ordinary Shares and AKITA Drilling, you can compare the effects of market volatilities on Captivision Ordinary and AKITA Drilling 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 Captivision Ordinary with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Captivision Ordinary and AKITA Drilling.

Diversification Opportunities for Captivision Ordinary and AKITA Drilling

-0.01

Correlation Coefficient

Captivision Ordinary  AKITA Drilling

Good diversification

The 3 months correlation between Captivision and AKITA is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Captivision Ordinary Shares and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Captivision Ordinary 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 Captivision Ordinary Shares are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Captivision Ordinary i.e., Captivision Ordinary and AKITA Drilling go up and down completely randomly.

Pair Corralation between Captivision Ordinary and AKITA Drilling

Given the investment horizon of 90 days Captivision Ordinary Shares is expected to generate 7.41 times more return on investment than AKITA Drilling. However, Captivision Ordinary is 7.41 times more volatile than AKITA Drilling. It trades about 0.05 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.13 per unit of risk. If you would invest  68.00  in Captivision Ordinary Shares on December 24, 2024 and sell it today you would lose (11.00) from holding Captivision Ordinary Shares or give up 16.18% of portfolio value over 90 days.

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

Captivision Ordinary Shares  vs.  AKITA Drilling

Captivision Ordinary

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Captivision Ordinary Shares are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Captivision Ordinary unveiled solid returns over the last few months and may actually be approaching a breakup point.

AKITA Drilling

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AKITA Drilling reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Captivision Ordinary and AKITA Drilling

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

The idea behind Captivision Ordinary Shares and AKITA Drilling 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..