Correlation Between Kinaxis and TECSYS

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

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

Diversification Opportunities for Kinaxis and TECSYS

0.53

Correlation Coefficient

Kinaxis  TECSYS

Very weak diversification

The 3 months correlation between Kinaxis and TECSYS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kinaxis and TECSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECSYS Inc and Kinaxis 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 Kinaxis are associated (or correlated) with TECSYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECSYS Inc has no effect on the direction of Kinaxis i.e., Kinaxis and TECSYS go up and down completely randomly.

Pair Corralation between Kinaxis and TECSYS

Assuming the 90 days trading horizon Kinaxis is expected to generate 0.83 times more return on investment than TECSYS. However, Kinaxis is 1.21 times less risky than TECSYS. It trades about -0.1 of its potential returns per unit of risk. TECSYS Inc is currently generating about -0.08 per unit of risk. If you would invest  17,371  in Kinaxis on December 30, 2024 and sell it today you would lose (1,847) from holding Kinaxis or give up 10.63% of portfolio value over 90 days.

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

Kinaxis  vs.  TECSYS Inc

Kinaxis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinaxis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

TECSYS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days TECSYS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Kinaxis and TECSYS

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

The idea behind Kinaxis and TECSYS Inc 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.