Correlation Between KlausTech and SRAX

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

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

Diversification Opportunities for KlausTech and SRAX

0.0

Correlation Coefficient

KlausTech  SRAX

Pay attention - limited upside

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

Pair Corralation between KlausTech and SRAX

Given the investment horizon of 90 days KlausTech is expected to generate 0.4 times more return on investment than SRAX. However, KlausTech is 2.51 times less risky than SRAX. It trades about -0.05 of its potential returns per unit of risk. SRAX Inc is currently generating about -0.23 per unit of risk. If you would invest  1.00  in KlausTech on October 11, 2024 and sell it today you would lose (0.98) from holding KlausTech or give up 98.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	7.61%
Values	Daily Returns

KlausTech  vs.  SRAX Inc

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.

SRAX Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SRAX Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, SRAX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KlausTech and SRAX

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

The idea behind KlausTech and SRAX 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.