Correlation Between KULR Technology and Loyalty Ventures

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

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

Diversification Opportunities for KULR Technology and Loyalty Ventures

-0.72

Correlation Coefficient

KULR Technology  Loyalty Ventures

Pay attention - limited upside

The 3 months correlation between KULR and Loyalty is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding KULR Technology Group and Loyalty Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loyalty Ventures and KULR Technology 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 KULR Technology Group are associated (or correlated) with Loyalty Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loyalty Ventures has no effect on the direction of KULR Technology i.e., KULR Technology and Loyalty Ventures go up and down completely randomly.

Pair Corralation between KULR Technology and Loyalty Ventures

Given the investment horizon of 90 days KULR Technology Group is expected to generate 0.27 times more return on investment than Loyalty Ventures. However, KULR Technology Group is 3.74 times less risky than Loyalty Ventures. It trades about 0.07 of its potential returns per unit of risk. Loyalty Ventures is currently generating about -0.16 per unit of risk. If you would invest  98.00  in KULR Technology Group on October 5, 2024 and sell it today you would earn a total of  245.50  from holding KULR Technology Group or generate 250.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.49%
Values	Daily Returns

KULR Technology Group  vs.  Loyalty Ventures

KULR Technology Group

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KULR Technology Group are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, KULR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Loyalty Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loyalty Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Loyalty Ventures is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with KULR Technology and Loyalty Ventures

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

The idea behind KULR Technology Group and Loyalty Ventures 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.