Correlation Between KlausTech and Network CN

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

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

Diversification Opportunities for KlausTech and Network CN

0.0

Correlation Coefficient

KlausTech  Network CN

Pay attention - limited upside

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

Pair Corralation between KlausTech and Network CN

If you would invest  100.00  in Network CN on December 2, 2024 and sell it today you would lose (82.00) from holding Network CN or give up 82.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

KlausTech  vs.  Network CN

KlausTech

Risk-Adjusted Performance

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.

Network CN

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Network CN are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Network CN displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KlausTech and Network CN

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

The idea behind KlausTech and Network CN 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.