Correlation Between Newbury Street and Kernel Group

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

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

Diversification Opportunities for Newbury Street and Kernel Group

-0.11

Correlation Coefficient

Newbury Street  Kernel Group

Good diversification

The 3 months correlation between Newbury and Kernel is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Newbury Street Acquisition and Kernel Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kernel Group Holdings and Newbury Street 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 Newbury Street Acquisition are associated (or correlated) with Kernel Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kernel Group Holdings has no effect on the direction of Newbury Street i.e., Newbury Street and Kernel Group go up and down completely randomly.

Pair Corralation between Newbury Street and Kernel Group

Assuming the 90 days horizon Newbury Street Acquisition is expected to generate 150.4 times more return on investment than Kernel Group. However, Newbury Street is 150.4 times more volatile than Kernel Group Holdings. It trades about 0.17 of its potential returns per unit of risk. Kernel Group Holdings is currently generating about -0.01 per unit of risk. If you would invest  3.50  in Newbury Street Acquisition on October 3, 2024 and sell it today you would earn a total of  5.50  from holding Newbury Street Acquisition or generate 157.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.34%
Values	Daily Returns

Newbury Street Acquisition  vs.  Kernel Group Holdings

Newbury Street Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newbury Street Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Newbury Street is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kernel Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kernel Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kernel Group is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Newbury Street and Kernel Group

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

The idea behind Newbury Street Acquisition and Kernel Group Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.