Correlation Between KDA and Minto Apartment

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

By analyzing existing cross correlation between KDA Group and Minto Apartment Real, you can compare the effects of market volatilities on KDA and Minto Apartment 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 KDA with a short position of Minto Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KDA and Minto Apartment.

Diversification Opportunities for KDA and Minto Apartment

0.63

Correlation Coefficient

KDA  Minto Apartment

Poor diversification

The 3 months correlation between KDA and Minto is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KDA Group and Minto Apartment Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minto Apartment Real and KDA 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 KDA Group are associated (or correlated) with Minto Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minto Apartment Real has no effect on the direction of KDA i.e., KDA and Minto Apartment go up and down completely randomly.

Pair Corralation between KDA and Minto Apartment

Assuming the 90 days horizon KDA Group is expected to generate 5.4 times more return on investment than Minto Apartment. However, KDA is 5.4 times more volatile than Minto Apartment Real. It trades about 0.05 of its potential returns per unit of risk. Minto Apartment Real is currently generating about -0.16 per unit of risk. If you would invest  25.00  in KDA Group on September 3, 2024 and sell it today you would earn a total of  2.00  from holding KDA Group or generate 8.0% return on investment over 90 days.

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

KDA Group  vs.  Minto Apartment Real

KDA Group

Risk-Adjusted Performance

3 of 100

Insignificant

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

Minto Apartment Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Minto Apartment Real has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with KDA and Minto Apartment

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

The idea behind KDA Group and Minto Apartment Real 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 Transaction History module to view history of all your transactions and understand their impact on performance.