Correlation Between Kaspien Holdings and DatChat

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

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

Diversification Opportunities for Kaspien Holdings and DatChat

-0.59

Correlation Coefficient

Kaspien Holdings  DatChat

Excellent diversification

The 3 months correlation between Kaspien and DatChat is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kaspien Holdings and DatChat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DatChat and Kaspien Holdings 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 Kaspien Holdings are associated (or correlated) with DatChat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DatChat has no effect on the direction of Kaspien Holdings i.e., Kaspien Holdings and DatChat go up and down completely randomly.

Pair Corralation between Kaspien Holdings and DatChat

If you would invest  172.00  in DatChat on October 25, 2024 and sell it today you would earn a total of  324.00  from holding DatChat or generate 188.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

Kaspien Holdings  vs.  DatChat

Kaspien Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

DatChat

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DatChat are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, DatChat unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kaspien Holdings and DatChat

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

The idea behind Kaspien Holdings and DatChat 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.