Correlation Between KAT Exploration and Concord Acquisition

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

By analyzing existing cross correlation between KAT Exploration and Concord Acquisition Corp, you can compare the effects of market volatilities on KAT Exploration and Concord Acquisition 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 KAT Exploration with a short position of Concord Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAT Exploration and Concord Acquisition.

Diversification Opportunities for KAT Exploration and Concord Acquisition

-0.12

Correlation Coefficient

KAT Exploration  Concord Acquisition

Good diversification

The 3 months correlation between KAT and Concord is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding KAT Exploration and Concord Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Acquisition Corp and KAT Exploration 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 KAT Exploration are associated (or correlated) with Concord Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Acquisition Corp has no effect on the direction of KAT Exploration i.e., KAT Exploration and Concord Acquisition go up and down completely randomly.

Pair Corralation between KAT Exploration and Concord Acquisition

If you would invest  0.04  in KAT Exploration on September 17, 2024 and sell it today you would lose (0.02) from holding KAT Exploration or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

KAT Exploration  vs.  Concord Acquisition Corp

KAT Exploration

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KAT Exploration are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, KAT Exploration showed solid returns over the last few months and may actually be approaching a breakup point.

Concord Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Concord Acquisition is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KAT Exploration and Concord Acquisition

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

The idea behind KAT Exploration and Concord Acquisition Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.