Correlation Between DatChat and Kaspien Holdings

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

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

Diversification Opportunities for DatChat and Kaspien Holdings

0.1

Correlation Coefficient

DatChat  Kaspien Holdings

Average diversification

The 3 months correlation between DatChat and Kaspien is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding DatChat and Kaspien Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaspien Holdings and DatChat 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 DatChat are associated (or correlated) with Kaspien Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaspien Holdings has no effect on the direction of DatChat i.e., DatChat and Kaspien Holdings go up and down completely randomly.

Pair Corralation between DatChat and Kaspien Holdings

Given the investment horizon of 90 days DatChat is expected to generate 1.81 times more return on investment than Kaspien Holdings. However, DatChat is 1.81 times more volatile than Kaspien Holdings. It trades about 0.05 of its potential returns per unit of risk. Kaspien Holdings is currently generating about -0.06 per unit of risk. If you would invest  670.00  in DatChat on October 10, 2024 and sell it today you would earn a total of  223.00  from holding DatChat or generate 33.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	21.21%
Values	Daily Returns

DatChat  vs.  Kaspien Holdings

DatChat

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DatChat are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, DatChat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kaspien Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaspien Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kaspien Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with DatChat and Kaspien Holdings

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

The idea behind DatChat and Kaspien Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.