Correlation Between Indo Global and KYN Capital

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

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

Diversification Opportunities for Indo Global and KYN Capital

-0.44

Correlation Coefficient

Indo Global  KYN Capital

Very good diversification

The 3 months correlation between Indo and KYN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Indo Global Exchange 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 Indo Global 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 Indo Global Exchange 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 Indo Global i.e., Indo Global and KYN Capital go up and down completely randomly.

Pair Corralation between Indo Global and KYN Capital

Given the investment horizon of 90 days Indo Global Exchange is expected to generate 0.77 times more return on investment than KYN Capital. However, Indo Global Exchange is 1.31 times less risky than KYN Capital. It trades about 0.12 of its potential returns per unit of risk. KYN Capital Group is currently generating about 0.01 per unit of risk. If you would invest  0.04  in Indo Global Exchange on September 4, 2024 and sell it today you would earn a total of  0.02  from holding Indo Global Exchange or generate 50.0% return on investment over 90 days.

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

Indo Global Exchange  vs.  KYN Capital Group

Indo Global Exchange

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Indo Global Exchange are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Indo Global showed solid returns over the last few months and may actually be approaching a breakup point.

KYN Capital Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KYN Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, KYN Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Indo Global and KYN Capital

The main advantage of trading using opposite Indo Global and KYN Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Global 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 Indo Global Exchange 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.