Correlation Between Kngt Clb and Dunham Emerging

Can any of the company-specific risk be diversified away by investing in both Kngt Clb and Dunham Emerging 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 Kngt Clb and Dunham Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kngt Clb Larg and Dunham Emerging Markets, you can compare the effects of market volatilities on Kngt Clb and Dunham Emerging 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 Kngt Clb with a short position of Dunham Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kngt Clb and Dunham Emerging.

Diversification Opportunities for Kngt Clb and Dunham Emerging

0.39

Correlation Coefficient

Kngt Clb  Dunham Emerging

Weak diversification

The 3 months correlation between Kngt and Dunham is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kngt Clb Larg and Dunham Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Emerging Markets and Kngt Clb 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 Kngt Clb Larg are associated (or correlated) with Dunham Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Emerging Markets has no effect on the direction of Kngt Clb i.e., Kngt Clb and Dunham Emerging go up and down completely randomly.

Pair Corralation between Kngt Clb and Dunham Emerging

Assuming the 90 days horizon Kngt Clb Larg is expected to generate 0.95 times more return on investment than Dunham Emerging. However, Kngt Clb Larg is 1.05 times less risky than Dunham Emerging. It trades about 0.21 of its potential returns per unit of risk. Dunham Emerging Markets is currently generating about -0.05 per unit of risk. If you would invest  1,711  in Kngt Clb Larg on October 25, 2024 and sell it today you would earn a total of  47.00  from holding Kngt Clb Larg or generate 2.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kngt Clb Larg  vs.  Dunham Emerging Markets

Kngt Clb Larg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kngt Clb Larg has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Kngt Clb is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dunham Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dunham Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Dunham Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kngt Clb and Dunham Emerging

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

The idea behind Kngt Clb Larg and Dunham Emerging Markets 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.