Correlation Between Kasten and KAT Exploration
Can any of the company-specific risk be diversified away by investing in both Kasten and KAT Exploration 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 KAT Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kasten Inc and KAT Exploration, you can compare the effects of market volatilities on Kasten and KAT Exploration 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 KAT Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kasten and KAT Exploration.
Diversification Opportunities for Kasten and KAT Exploration
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kasten and KAT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kasten Inc and KAT Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAT Exploration 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 KAT Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAT Exploration has no effect on the direction of Kasten i.e., Kasten and KAT Exploration go up and down completely randomly.
Pair Corralation between Kasten and KAT Exploration
Given the investment horizon of 90 days Kasten Inc is expected to generate 1.97 times more return on investment than KAT Exploration. However, Kasten is 1.97 times more volatile than KAT Exploration. It trades about 0.09 of its potential returns per unit of risk. KAT Exploration is currently generating about 0.07 per unit of risk. If you would invest 0.60 in Kasten Inc on December 26, 2024 and sell it today you would lose (0.10) from holding Kasten Inc or give up 16.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kasten Inc vs. KAT Exploration
Performance |
Timeline |
Kasten Inc |
KAT Exploration |
Kasten and KAT Exploration Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kasten and KAT Exploration
The main advantage of trading using opposite Kasten and KAT Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kasten position performs unexpectedly, KAT Exploration 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 KAT Exploration will offset losses from the drop in KAT Exploration's long position.Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent Group |
KAT Exploration vs. Southern ITS International | KAT Exploration vs. UHF Logistics Group | KAT Exploration vs. Intl Star | KAT Exploration vs. Church Crawford |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Transaction History View history of all your transactions and understand their impact on performance | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |