Correlation Between Jade Gas and Kinatico

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

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

Diversification Opportunities for Jade Gas and Kinatico

-0.47

Correlation Coefficient

Jade Gas  Kinatico

Very good diversification

The 3 months correlation between Jade and Kinatico is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Jade Gas Holdings and Kinatico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinatico and Jade Gas 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 Jade Gas Holdings are associated (or correlated) with Kinatico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinatico has no effect on the direction of Jade Gas i.e., Jade Gas and Kinatico go up and down completely randomly.

Pair Corralation between Jade Gas and Kinatico

Assuming the 90 days trading horizon Jade Gas Holdings is expected to under-perform the Kinatico. But the stock apears to be less risky and, when comparing its historical volatility, Jade Gas Holdings is 1.12 times less risky than Kinatico. The stock trades about -0.03 of its potential returns per unit of risk. The Kinatico is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Kinatico on October 6, 2024 and sell it today you would earn a total of  3.00  from holding Kinatico or generate 27.27% return on investment over 90 days.

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

Jade Gas Holdings  vs.  Kinatico

Jade Gas Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jade Gas Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Kinatico

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinatico are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kinatico unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jade Gas and Kinatico

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

The idea behind Jade Gas Holdings and Kinatico 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.