Correlation Between KGI Securities and Kulthorn Kirby

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

By analyzing existing cross correlation between KGI Securities Public and Kulthorn Kirby Public, you can compare the effects of market volatilities on KGI Securities and Kulthorn Kirby 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 KGI Securities with a short position of Kulthorn Kirby. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGI Securities and Kulthorn Kirby.

Diversification Opportunities for KGI Securities and Kulthorn Kirby

0.22

Correlation Coefficient

KGI Securities  Kulthorn Kirby

Modest diversification

The 3 months correlation between KGI and Kulthorn is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding KGI Securities Public and Kulthorn Kirby Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulthorn Kirby Public and KGI Securities 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 KGI Securities Public are associated (or correlated) with Kulthorn Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulthorn Kirby Public has no effect on the direction of KGI Securities i.e., KGI Securities and Kulthorn Kirby go up and down completely randomly.

Pair Corralation between KGI Securities and Kulthorn Kirby

Assuming the 90 days trading horizon KGI Securities is expected to generate 2644.1 times less return on investment than Kulthorn Kirby. But when comparing it to its historical volatility, KGI Securities Public is 112.39 times less risky than Kulthorn Kirby. It trades about 0.01 of its potential returns per unit of risk. Kulthorn Kirby Public is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Kulthorn Kirby Public on September 3, 2024 and sell it today you would earn a total of  4.00  from holding Kulthorn Kirby Public or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

KGI Securities Public  vs.  Kulthorn Kirby Public

KGI Securities Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KGI Securities Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, KGI Securities is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Kulthorn Kirby Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kulthorn Kirby Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Kulthorn Kirby disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KGI Securities and Kulthorn Kirby

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

The idea behind KGI Securities Public and Kulthorn Kirby Public 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.