Correlation Between Capital Financial and KYN Capital

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

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

Diversification Opportunities for Capital Financial and KYN Capital

-0.41

Correlation Coefficient

Capital Financial  KYN Capital

Very good diversification

The 3 months correlation between Capital and KYN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Gl and KYN Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KYN Capital Group and Capital Financial 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 Capital Financial Gl are associated (or correlated) with KYN Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KYN Capital Group has no effect on the direction of Capital Financial i.e., Capital Financial and KYN Capital go up and down completely randomly.

Pair Corralation between Capital Financial and KYN Capital

Given the investment horizon of 90 days Capital Financial Gl is expected to generate 13.13 times more return on investment than KYN Capital. However, Capital Financial is 13.13 times more volatile than KYN Capital Group. It trades about 0.11 of its potential returns per unit of risk. KYN Capital Group is currently generating about 0.03 per unit of risk. If you would invest  0.01  in Capital Financial Gl on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Capital Financial Gl or generate 0.0% return on investment over 90 days.

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

Capital Financial Gl  vs.  KYN Capital Group

Capital Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Financial Gl are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Capital Financial showed solid returns over the last few months and may actually be approaching a breakup point.

KYN Capital Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KYN Capital Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, KYN Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capital Financial and KYN Capital

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

The idea behind Capital Financial Gl and KYN Capital 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.