Correlation Between Hedge Real and Kinea High

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

By analyzing existing cross correlation between Hedge Real Estate and Kinea High Yield, you can compare the effects of market volatilities on Hedge Real and Kinea High 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 Hedge Real with a short position of Kinea High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hedge Real and Kinea High.

Diversification Opportunities for Hedge Real and Kinea High

0.11

Correlation Coefficient

Hedge Real  Kinea High

Average diversification

The 3 months correlation between Hedge and Kinea is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hedge Real Estate and Kinea High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinea High Yield and Hedge Real 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 Hedge Real Estate are associated (or correlated) with Kinea High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinea High Yield has no effect on the direction of Hedge Real i.e., Hedge Real and Kinea High go up and down completely randomly.

Pair Corralation between Hedge Real and Kinea High

Assuming the 90 days trading horizon Hedge Real Estate is expected to generate 1.15 times more return on investment than Kinea High. However, Hedge Real is 1.15 times more volatile than Kinea High Yield. It trades about 0.07 of its potential returns per unit of risk. Kinea High Yield is currently generating about 0.0 per unit of risk. If you would invest  8,392  in Hedge Real Estate on October 23, 2024 and sell it today you would earn a total of  408.00  from holding Hedge Real Estate or generate 4.86% return on investment over 90 days.

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

Hedge Real Estate  vs.  Kinea High Yield

Hedge Real Estate

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hedge Real Estate are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, Hedge Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinea High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kinea High Yield has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical indicators, Kinea High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hedge Real and Kinea High

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

The idea behind Hedge Real Estate and Kinea High Yield 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.