Correlation Between Kontrol Technologies and SEATech Ventures

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

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

Diversification Opportunities for Kontrol Technologies and SEATech Ventures

0.09

Correlation Coefficient

Kontrol Technologies  SEATech Ventures

Significant diversification

The 3 months correlation between Kontrol and SEATech is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kontrol Technologies Corp and SEATech Ventures Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEATech Ventures Corp and Kontrol Technologies 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 Kontrol Technologies Corp are associated (or correlated) with SEATech Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEATech Ventures Corp has no effect on the direction of Kontrol Technologies i.e., Kontrol Technologies and SEATech Ventures go up and down completely randomly.

Pair Corralation between Kontrol Technologies and SEATech Ventures

Assuming the 90 days horizon Kontrol Technologies Corp is expected to generate 0.98 times more return on investment than SEATech Ventures. However, Kontrol Technologies Corp is 1.02 times less risky than SEATech Ventures. It trades about -0.03 of its potential returns per unit of risk. SEATech Ventures Corp is currently generating about -0.06 per unit of risk. If you would invest  13.00  in Kontrol Technologies Corp on December 30, 2024 and sell it today you would lose (2.00) from holding Kontrol Technologies Corp or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kontrol Technologies Corp  vs.  SEATech Ventures Corp

Kontrol Technologies Corp

Risk-Adjusted Performance

Very Weak

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

SEATech Ventures Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEATech Ventures Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Kontrol Technologies and SEATech Ventures

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

The idea behind Kontrol Technologies Corp and SEATech Ventures Corp 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.