Correlation Between Memscap Regpt and Kumulus Vape

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

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

Diversification Opportunities for Memscap Regpt and Kumulus Vape

0.49

Correlation Coefficient

Memscap Regpt  Kumulus Vape

Very weak diversification

The 3 months correlation between Memscap and Kumulus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Memscap Regpt and Kumulus Vape SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumulus Vape SA and Memscap Regpt 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 Memscap Regpt are associated (or correlated) with Kumulus Vape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumulus Vape SA has no effect on the direction of Memscap Regpt i.e., Memscap Regpt and Kumulus Vape go up and down completely randomly.

Pair Corralation between Memscap Regpt and Kumulus Vape

Assuming the 90 days trading horizon Memscap Regpt is expected to generate 1.82 times more return on investment than Kumulus Vape. However, Memscap Regpt is 1.82 times more volatile than Kumulus Vape SA. It trades about -0.18 of its potential returns per unit of risk. Kumulus Vape SA is currently generating about -0.38 per unit of risk. If you would invest  368.00  in Memscap Regpt on August 31, 2024 and sell it today you would lose (46.00) from holding Memscap Regpt or give up 12.5% of portfolio value over 90 days.

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

Memscap Regpt  vs.  Kumulus Vape SA

Memscap Regpt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Memscap Regpt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Kumulus Vape SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kumulus Vape SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Memscap Regpt and Kumulus Vape

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

The idea behind Memscap Regpt and Kumulus Vape SA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.