Correlation Between Kingsmen CMTI and Masterkool International

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

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

Diversification Opportunities for Kingsmen CMTI and Masterkool International

0.39

Correlation Coefficient

Kingsmen CMTI  Masterkool International

Weak diversification

The 3 months correlation between Kingsmen and Masterkool is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kingsmen CMTI Public and Masterkool International Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterkool International and Kingsmen CMTI 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 Kingsmen CMTI Public are associated (or correlated) with Masterkool International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterkool International has no effect on the direction of Kingsmen CMTI i.e., Kingsmen CMTI and Masterkool International go up and down completely randomly.

Pair Corralation between Kingsmen CMTI and Masterkool International

Given the investment horizon of 90 days Kingsmen CMTI Public is expected to generate 0.8 times more return on investment than Masterkool International. However, Kingsmen CMTI Public is 1.25 times less risky than Masterkool International. It trades about 0.06 of its potential returns per unit of risk. Masterkool International Public is currently generating about 0.0 per unit of risk. If you would invest  110.00  in Kingsmen CMTI Public on September 4, 2024 and sell it today you would earn a total of  9.00  from holding Kingsmen CMTI Public or generate 8.18% return on investment over 90 days.

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

Kingsmen CMTI Public  vs.  Masterkool International Publi

Kingsmen CMTI Public

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsmen CMTI Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Kingsmen CMTI may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Masterkool International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Masterkool International Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Masterkool International 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 Kingsmen CMTI and Masterkool International

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

The idea behind Kingsmen CMTI Public and Masterkool International Public 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.