Correlation Between KYN Capital and Atlanticus Holdings

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

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

Diversification Opportunities for KYN Capital and Atlanticus Holdings

-0.02

Correlation Coefficient

KYN Capital  Atlanticus Holdings

Good diversification

The 3 months correlation between KYN and Atlanticus is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding KYN Capital Group and Atlanticus Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings Corp and KYN Capital 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 KYN Capital Group are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings Corp has no effect on the direction of KYN Capital i.e., KYN Capital and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between KYN Capital and Atlanticus Holdings

Given the investment horizon of 90 days KYN Capital Group is expected to generate 21.53 times more return on investment than Atlanticus Holdings. However, KYN Capital is 21.53 times more volatile than Atlanticus Holdings Corp. It trades about 0.07 of its potential returns per unit of risk. Atlanticus Holdings Corp is currently generating about 0.06 per unit of risk. If you would invest  0.05  in KYN Capital Group on December 29, 2024 and sell it today you would earn a total of  0.00  from holding KYN Capital Group or generate 0.0% return on investment over 90 days.

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

KYN Capital Group  vs.  Atlanticus Holdings Corp

KYN Capital Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KYN Capital Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, KYN Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Atlanticus Holdings Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with KYN Capital and Atlanticus Holdings

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

The idea behind KYN Capital Group and Atlanticus Holdings Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.