Correlation Between KYN Capital and Nelnet

Can any of the company-specific risk be diversified away by investing in both KYN Capital and Nelnet 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 Nelnet 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 Nelnet Inc, you can compare the effects of market volatilities on KYN Capital and Nelnet 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 Nelnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of KYN Capital and Nelnet.

Diversification Opportunities for KYN Capital and Nelnet

-0.01

Correlation Coefficient

KYN Capital  Nelnet

Good diversification

The 3 months correlation between KYN and Nelnet is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding KYN Capital Group and Nelnet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nelnet Inc 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 Nelnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nelnet Inc has no effect on the direction of KYN Capital i.e., KYN Capital and Nelnet go up and down completely randomly.

Pair Corralation between KYN Capital and Nelnet

Given the investment horizon of 90 days KYN Capital Group is expected to generate 9.88 times more return on investment than Nelnet. However, KYN Capital is 9.88 times more volatile than Nelnet Inc. It trades about 0.04 of its potential returns per unit of risk. Nelnet Inc is currently generating about 0.06 per unit of risk. If you would invest  0.07  in KYN Capital Group on December 26, 2024 and sell it today you would lose (0.02) from holding KYN Capital Group or give up 28.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

KYN Capital Group  vs.  Nelnet Inc

KYN Capital Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KYN Capital Group are ranked lower than 3 (%) 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.

Nelnet Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nelnet Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Nelnet may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with KYN Capital and Nelnet

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

The idea behind KYN Capital Group and Nelnet 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.