Correlation Between NexGel Warrant and KULR Technology

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

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

Diversification Opportunities for NexGel Warrant and KULR Technology

0.62

Correlation Coefficient

NexGel Warrant  KULR Technology

Poor diversification

The 3 months correlation between NexGel and KULR is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NexGel Warrant and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group and NexGel Warrant 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 NexGel Warrant are associated (or correlated) with KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of NexGel Warrant i.e., NexGel Warrant and KULR Technology go up and down completely randomly.

Pair Corralation between NexGel Warrant and KULR Technology

Assuming the 90 days horizon NexGel Warrant is expected to generate 5.68 times less return on investment than KULR Technology. But when comparing it to its historical volatility, NexGel Warrant is 1.75 times less risky than KULR Technology. It trades about 0.12 of its potential returns per unit of risk. KULR Technology Group is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  29.00  in KULR Technology Group on October 6, 2024 and sell it today you would earn a total of  303.00  from holding KULR Technology Group or generate 1044.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

NexGel Warrant  vs.  KULR Technology Group

NexGel Warrant

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NexGel Warrant are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting essential indicators, NexGel Warrant showed solid returns over the last few months and may actually be approaching a breakup point.

KULR Technology Group

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KULR Technology Group are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting essential indicators, KULR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NexGel Warrant and KULR Technology

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

The idea behind NexGel Warrant and KULR Technology Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.