Correlation Between Kasten and Gemz Corp
Can any of the company-specific risk be diversified away by investing in both Kasten and Gemz Corp 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 Kasten and Gemz Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasten Inc and Gemz Corp, you can compare the effects of market volatilities on Kasten and Gemz Corp 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 Kasten with a short position of Gemz Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasten and Gemz Corp.
Diversification Opportunities for Kasten and Gemz Corp
Good diversification
The 3 months correlation between Kasten and Gemz is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kasten Inc and Gemz Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemz Corp and Kasten 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 Kasten Inc are associated (or correlated) with Gemz Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemz Corp has no effect on the direction of Kasten i.e., Kasten and Gemz Corp go up and down completely randomly.
Pair Corralation between Kasten and Gemz Corp
Given the investment horizon of 90 days Kasten Inc is expected to generate 0.98 times more return on investment than Gemz Corp. However, Kasten Inc is 1.02 times less risky than Gemz Corp. It trades about 0.16 of its potential returns per unit of risk. Gemz Corp is currently generating about 0.04 per unit of risk. If you would invest 0.42 in Kasten Inc on December 5, 2024 and sell it today you would earn a total of 0.58 from holding Kasten Inc or generate 138.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kasten Inc vs. Gemz Corp
Performance |
Timeline |
Kasten Inc |
Gemz Corp |
Kasten and Gemz Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kasten and Gemz Corp
The main advantage of trading using opposite Kasten and Gemz Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasten position performs unexpectedly, Gemz Corp 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 Gemz Corp will offset losses from the drop in Gemz Corp's long position.Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent Group |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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