Correlation Between Kernel Group and Financial Strategies

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

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

Diversification Opportunities for Kernel Group and Financial Strategies

0.13

Correlation Coefficient

Kernel Group  Financial Strategies

Average diversification

The 3 months correlation between Kernel and Financial is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kernel Group Holdings and Financial Strategies Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial Strategies and Kernel 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 Kernel Group Holdings are associated (or correlated) with Financial Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial Strategies has no effect on the direction of Kernel Group i.e., Kernel Group and Financial Strategies go up and down completely randomly.

Pair Corralation between Kernel Group and Financial Strategies

If you would invest  1,090  in Financial Strategies Acquisition on October 3, 2024 and sell it today you would earn a total of  0.00  from holding Financial Strategies Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.6%
Values	Daily Returns

Kernel Group Holdings  vs.  Financial Strategies Acquisiti

Kernel Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kernel Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kernel Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Financial Strategies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Financial Strategies Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Financial Strategies is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kernel Group and Financial Strategies

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

The idea behind Kernel Group Holdings and Financial Strategies Acquisition 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.