Correlation Between Meet Kevin and VictoryShares THB

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

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

Diversification Opportunities for Meet Kevin and VictoryShares THB

-0.26

Correlation Coefficient

Meet Kevin  VictoryShares THB

Very good diversification

The 3 months correlation between Meet and VictoryShares is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding The Meet Kevin and VictoryShares THB Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares THB Mid and Meet Kevin 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 The Meet Kevin are associated (or correlated) with VictoryShares THB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares THB Mid has no effect on the direction of Meet Kevin i.e., Meet Kevin and VictoryShares THB go up and down completely randomly.

Pair Corralation between Meet Kevin and VictoryShares THB

Allowing for the 90-day total investment horizon The Meet Kevin is expected to generate 1.33 times more return on investment than VictoryShares THB. However, Meet Kevin is 1.33 times more volatile than VictoryShares THB Mid. It trades about 0.04 of its potential returns per unit of risk. VictoryShares THB Mid is currently generating about -0.04 per unit of risk. If you would invest  2,560  in The Meet Kevin on December 30, 2024 and sell it today you would earn a total of  50.00  from holding The Meet Kevin or generate 1.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.74%
Values	Daily Returns

The Meet Kevin  vs.  VictoryShares THB Mid

Meet Kevin

Risk-Adjusted Performance

Insignificant

Over the last 90 days The Meet Kevin has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Meet Kevin is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

VictoryShares THB Mid

Risk-Adjusted Performance

Very Weak

Over the last 90 days VictoryShares THB Mid has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, VictoryShares THB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Meet Kevin and VictoryShares THB

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

The idea behind The Meet Kevin and VictoryShares THB Mid 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 Transaction History module to view history of all your transactions and understand their impact on performance.