Correlation Between FiscalNote Holdings and Kontrol Technologies

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

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

Diversification Opportunities for FiscalNote Holdings and Kontrol Technologies

-0.33

Correlation Coefficient

FiscalNote Holdings  Kontrol Technologies

Very good diversification

The 3 months correlation between FiscalNote and Kontrol is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding FiscalNote Holdings and Kontrol Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontrol Technologies Corp and FiscalNote Holdings 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 FiscalNote Holdings are associated (or correlated) with Kontrol Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontrol Technologies Corp has no effect on the direction of FiscalNote Holdings i.e., FiscalNote Holdings and Kontrol Technologies go up and down completely randomly.

Pair Corralation between FiscalNote Holdings and Kontrol Technologies

Given the investment horizon of 90 days FiscalNote Holdings is expected to under-perform the Kontrol Technologies. In addition to that, FiscalNote Holdings is 1.14 times more volatile than Kontrol Technologies Corp. It trades about -0.01 of its total potential returns per unit of risk. Kontrol Technologies Corp is currently generating about 0.01 per unit of volatility. If you would invest  30.00  in Kontrol Technologies Corp on September 14, 2024 and sell it today you would lose (17.00) from holding Kontrol Technologies Corp or give up 56.67% of portfolio value over 90 days.

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

FiscalNote Holdings  vs.  Kontrol Technologies Corp

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FiscalNote Holdings 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 Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kontrol Technologies Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kontrol Technologies Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Kontrol Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FiscalNote Holdings and Kontrol Technologies

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

The idea behind FiscalNote Holdings and Kontrol Technologies Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.