Correlation Between KORE Group and New Ulm

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

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

Diversification Opportunities for KORE Group and New Ulm

0.55

Correlation Coefficient

KORE Group  New Ulm

Very weak diversification

The 3 months correlation between KORE and New is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding KORE Group Holdings and New Ulm Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Ulm Telecom and KORE Group 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 KORE Group Holdings are associated (or correlated) with New Ulm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Ulm Telecom has no effect on the direction of KORE Group i.e., KORE Group and New Ulm go up and down completely randomly.

Pair Corralation between KORE Group and New Ulm

Given the investment horizon of 90 days KORE Group Holdings is expected to generate 2.05 times more return on investment than New Ulm. However, KORE Group is 2.05 times more volatile than New Ulm Telecom. It trades about 0.16 of its potential returns per unit of risk. New Ulm Telecom is currently generating about 0.09 per unit of risk. If you would invest  147.00  in KORE Group Holdings on December 23, 2024 and sell it today you would earn a total of  111.00  from holding KORE Group Holdings or generate 75.51% return on investment over 90 days.

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

KORE Group Holdings  vs.  New Ulm Telecom

KORE Group Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KORE Group Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, KORE Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

New Ulm Telecom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in New Ulm Telecom are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, New Ulm reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KORE Group and New Ulm

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

The idea behind KORE Group Holdings and New Ulm Telecom 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.