Correlation Between Killbuck Bancshares and Nasdaq

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

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

Diversification Opportunities for Killbuck Bancshares and Nasdaq

0.05

Correlation Coefficient

Killbuck Bancshares  Nasdaq

Significant diversification

The 3 months correlation between Killbuck and Nasdaq is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Killbuck Bancshares and Nasdaq Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq Inc and Killbuck Bancshares 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 Killbuck Bancshares are associated (or correlated) with Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq Inc has no effect on the direction of Killbuck Bancshares i.e., Killbuck Bancshares and Nasdaq go up and down completely randomly.

Pair Corralation between Killbuck Bancshares and Nasdaq

Given the investment horizon of 90 days Killbuck Bancshares is expected to generate 2.21 times more return on investment than Nasdaq. However, Killbuck Bancshares is 2.21 times more volatile than Nasdaq Inc. It trades about 0.19 of its potential returns per unit of risk. Nasdaq Inc is currently generating about 0.16 per unit of risk. If you would invest  11,000  in Killbuck Bancshares on September 15, 2024 and sell it today you would earn a total of  800.00  from holding Killbuck Bancshares or generate 7.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Killbuck Bancshares  vs.  Nasdaq Inc

Killbuck Bancshares

Risk-Adjusted Performance

4 of 100

Insignificant

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

Nasdaq Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Killbuck Bancshares and Nasdaq

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

The idea behind Killbuck Bancshares and Nasdaq 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.