Correlation Between KTAM SET50 and KTAM Gold

Can any of the company-specific risk be diversified away by investing in both KTAM SET50 and KTAM Gold 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 KTAM SET50 and KTAM Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KTAM SET50 ETF and KTAM Gold ETF, you can compare the effects of market volatilities on KTAM SET50 and KTAM Gold 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 KTAM SET50 with a short position of KTAM Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTAM SET50 and KTAM Gold.

Diversification Opportunities for KTAM SET50 and KTAM Gold

0.0

Correlation Coefficient

KTAM SET50  KTAM Gold

Pay attention - limited upside

The 3 months correlation between KTAM and KTAM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KTAM SET50 ETF and KTAM Gold ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTAM Gold ETF and KTAM SET50 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 KTAM SET50 ETF are associated (or correlated) with KTAM Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTAM Gold ETF has no effect on the direction of KTAM SET50 i.e., KTAM SET50 and KTAM Gold go up and down completely randomly.

Pair Corralation between KTAM SET50 and KTAM Gold

If you would invest (100.00) in KTAM SET50 ETF on October 6, 2024 and sell it today you would earn a total of  100.00  from holding KTAM SET50 ETF or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

KTAM SET50 ETF  vs.  KTAM Gold ETF

KTAM SET50 ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KTAM SET50 ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, KTAM SET50 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

KTAM Gold ETF

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KTAM Gold ETF are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, KTAM Gold is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with KTAM SET50 and KTAM Gold

The main advantage of trading using opposite KTAM SET50 and KTAM Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTAM SET50 position performs unexpectedly, KTAM Gold 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 KTAM Gold will offset losses from the drop in KTAM Gold's long position.

The idea behind KTAM SET50 ETF and KTAM Gold ETF 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.