Correlation Between KAT Exploration and Southern ITS

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both KAT Exploration and Southern ITS 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 Southern ITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAT Exploration and Southern ITS International, you can compare the effects of market volatilities on KAT Exploration and Southern ITS 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 Southern ITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAT Exploration and Southern ITS.

Diversification Opportunities for KAT Exploration and Southern ITS

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between KAT and Southern is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding KAT Exploration and Southern ITS International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern ITS Interna 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 Southern ITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern ITS Interna has no effect on the direction of KAT Exploration i.e., KAT Exploration and Southern ITS go up and down completely randomly.

Pair Corralation between KAT Exploration and Southern ITS

Given the investment horizon of 90 days KAT Exploration is expected to generate 2.02 times more return on investment than Southern ITS. However, KAT Exploration is 2.02 times more volatile than Southern ITS International. It trades about 0.07 of its potential returns per unit of risk. Southern ITS International is currently generating about 0.06 per unit of risk. If you would invest  0.03  in KAT Exploration on December 27, 2024 and sell it today you would earn a total of  0.00  from holding KAT Exploration or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.36%
ValuesDaily Returns

KAT Exploration  vs.  Southern ITS International

 Performance 
       Timeline  
KAT Exploration 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in KAT Exploration are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, KAT Exploration showed solid returns over the last few months and may actually be approaching a breakup point.
Southern ITS Interna 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Southern ITS International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Southern ITS unveiled solid returns over the last few months and may actually be approaching a breakup point.

KAT Exploration and Southern ITS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KAT Exploration and Southern ITS

The main advantage of trading using opposite KAT Exploration and Southern ITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAT Exploration position performs unexpectedly, Southern ITS 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 Southern ITS will offset losses from the drop in Southern ITS's long position.
The idea behind KAT Exploration and Southern ITS International 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.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Stocks Directory
Find actively traded stocks across global markets
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets