Correlation Between Kap Industrial and Centaur Bci

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

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

Diversification Opportunities for Kap Industrial and Centaur Bci

-0.15

Correlation Coefficient

Kap Industrial  Centaur Bci

Good diversification

The 3 months correlation between Kap and Centaur is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kap Industrial Holdings and Centaur Bci Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Bci Balanced and Kap Industrial 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 Kap Industrial Holdings are associated (or correlated) with Centaur Bci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Bci Balanced has no effect on the direction of Kap Industrial i.e., Kap Industrial and Centaur Bci go up and down completely randomly.

Pair Corralation between Kap Industrial and Centaur Bci

Assuming the 90 days trading horizon Kap Industrial Holdings is expected to under-perform the Centaur Bci. In addition to that, Kap Industrial is 3.7 times more volatile than Centaur Bci Balanced. It trades about -0.03 of its total potential returns per unit of risk. Centaur Bci Balanced is currently generating about 0.22 per unit of volatility. If you would invest  230.00  in Centaur Bci Balanced on September 13, 2024 and sell it today you would earn a total of  14.00  from holding Centaur Bci Balanced or generate 6.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Kap Industrial Holdings  vs.  Centaur Bci Balanced

Kap Industrial Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kap Industrial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Kap Industrial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Centaur Bci Balanced

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Bci Balanced are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Centaur Bci is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kap Industrial and Centaur Bci

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

The idea behind Kap Industrial Holdings and Centaur Bci Balanced 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.