Correlation Between MicroStrategy Incorporated and Kainos Group
Can any of the company-specific risk be diversified away by investing in both MicroStrategy Incorporated and Kainos Group 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 MicroStrategy Incorporated and Kainos Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroStrategy Incorporated and Kainos Group plc, you can compare the effects of market volatilities on MicroStrategy Incorporated and Kainos Group 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 MicroStrategy Incorporated with a short position of Kainos Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroStrategy Incorporated and Kainos Group.
Diversification Opportunities for MicroStrategy Incorporated and Kainos Group
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MicroStrategy and Kainos is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding MicroStrategy Incorporated and Kainos Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kainos Group plc and MicroStrategy Incorporated 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 MicroStrategy Incorporated are associated (or correlated) with Kainos Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kainos Group plc has no effect on the direction of MicroStrategy Incorporated i.e., MicroStrategy Incorporated and Kainos Group go up and down completely randomly.
Pair Corralation between MicroStrategy Incorporated and Kainos Group
Given the investment horizon of 90 days MicroStrategy Incorporated is expected to generate 1.54 times more return on investment than Kainos Group. However, MicroStrategy Incorporated is 1.54 times more volatile than Kainos Group plc. It trades about 0.04 of its potential returns per unit of risk. Kainos Group plc is currently generating about 0.01 per unit of risk. If you would invest 38,479 in MicroStrategy Incorporated on September 19, 2024 and sell it today you would earn a total of 163.00 from holding MicroStrategy Incorporated or generate 0.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MicroStrategy Incorporated vs. Kainos Group plc
Performance |
Timeline |
MicroStrategy Incorporated |
Kainos Group plc |
MicroStrategy Incorporated and Kainos Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MicroStrategy Incorporated and Kainos Group
The main advantage of trading using opposite MicroStrategy Incorporated and Kainos Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroStrategy Incorporated position performs unexpectedly, Kainos Group 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 Kainos Group will offset losses from the drop in Kainos Group's long position.MicroStrategy Incorporated vs. Swvl Holdings Corp | MicroStrategy Incorporated vs. Guardforce AI Co | MicroStrategy Incorporated vs. Thayer Ventures Acquisition |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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