Correlation Between KASPIKZ 1 and Adobe

Can any of the company-specific risk be diversified away by investing in both KASPIKZ 1 and Adobe 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 KASPIKZ 1 and Adobe into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KASPIKZ 1 and Adobe Inc, you can compare the effects of market volatilities on KASPIKZ 1 and Adobe 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 KASPIKZ 1 with a short position of Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of KASPIKZ 1 and Adobe.

Diversification Opportunities for KASPIKZ 1 and Adobe

0.44

Correlation Coefficient

KASPIKZ 1  Adobe

Very weak diversification

The 3 months correlation between KASPIKZ and Adobe is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KASPIKZ 1 and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and KASPIKZ 1 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 KASPIKZ 1 are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of KASPIKZ 1 i.e., KASPIKZ 1 and Adobe go up and down completely randomly.

Pair Corralation between KASPIKZ 1 and Adobe

Assuming the 90 days horizon KASPIKZ 1 is expected to generate 0.81 times more return on investment than Adobe. However, KASPIKZ 1 is 1.23 times less risky than Adobe. It trades about -0.07 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.15 per unit of risk. If you would invest  9,800  in KASPIKZ 1 on September 22, 2024 and sell it today you would lose (450.00) from holding KASPIKZ 1 or give up 4.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

KASPIKZ 1  vs.  Adobe Inc

KASPIKZ 1

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KASPIKZ 1 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KASPIKZ 1 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Adobe Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adobe Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with KASPIKZ 1 and Adobe

The main advantage of trading using opposite KASPIKZ 1 and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KASPIKZ 1 position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe's long position.

The idea behind KASPIKZ 1 and Adobe Inc 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.