Correlation Between KlausTech and Mastermind

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

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

Diversification Opportunities for KlausTech and Mastermind

0.0

Correlation Coefficient

KlausTech  Mastermind

Pay attention - limited upside

The 3 months correlation between KlausTech and Mastermind is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KlausTech and Mastermind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastermind and KlausTech 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 KlausTech are associated (or correlated) with Mastermind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastermind has no effect on the direction of KlausTech i.e., KlausTech and Mastermind go up and down completely randomly.

Pair Corralation between KlausTech and Mastermind

Given the investment horizon of 90 days KlausTech is expected to under-perform the Mastermind. But the pink sheet apears to be less risky and, when comparing its historical volatility, KlausTech is 2.87 times less risky than Mastermind. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Mastermind is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Mastermind on October 11, 2024 and sell it today you would lose (25.50) from holding Mastermind or give up 85.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	90.3%
Values	Daily Returns

KlausTech  vs.  Mastermind

KlausTech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KlausTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, KlausTech is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Mastermind

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mastermind are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Mastermind exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KlausTech and Mastermind

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

The idea behind KlausTech and Mastermind 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.