Correlation Between MLN and Kamino

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

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

Diversification Opportunities for MLN and Kamino

0.89

Correlation Coefficient

MLN  Kamino

Very poor diversification

The 3 months correlation between MLN and Kamino is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding MLN and Kamino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamino and MLN 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 MLN are associated (or correlated) with Kamino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamino has no effect on the direction of MLN i.e., MLN and Kamino go up and down completely randomly.

Pair Corralation between MLN and Kamino

Assuming the 90 days trading horizon MLN is expected to generate 0.8 times more return on investment than Kamino. However, MLN is 1.24 times less risky than Kamino. It trades about -0.07 of its potential returns per unit of risk. Kamino is currently generating about -0.14 per unit of risk. If you would invest  1,859  in MLN on December 30, 2024 and sell it today you would lose (651.00) from holding MLN or give up 35.02% of portfolio value over 90 days.

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

MLN  vs.  Kamino

MLN

Risk-Adjusted Performance

Very Weak

Over the last 90 days MLN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for MLN shareholders.

Kamino

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kamino has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Kamino shareholders.

Pair Trading with MLN and Kamino

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

The idea behind MLN and Kamino 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.