Correlation Between PULSION Medical and KBC GR

Can any of the company-specific risk be diversified away by investing in both PULSION Medical and KBC GR 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 PULSION Medical and KBC GR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PULSION Medical Systems and KBC GR , you can compare the effects of market volatilities on PULSION Medical and KBC GR 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 PULSION Medical with a short position of KBC GR. Check out your portfolio center. Please also check ongoing floating volatility patterns of PULSION Medical and KBC GR.

Diversification Opportunities for PULSION Medical and KBC GR

0.27

Correlation Coefficient

PULSION Medical  KBC GR

Modest diversification

The 3 months correlation between PULSION and KBC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PULSION Medical Systems and KBC GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC GR and PULSION Medical 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 PULSION Medical Systems are associated (or correlated) with KBC GR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC GR has no effect on the direction of PULSION Medical i.e., PULSION Medical and KBC GR go up and down completely randomly.

Pair Corralation between PULSION Medical and KBC GR

Assuming the 90 days trading horizon PULSION Medical is expected to generate 25.03 times less return on investment than KBC GR. But when comparing it to its historical volatility, PULSION Medical Systems is 3.13 times less risky than KBC GR. It trades about 0.02 of its potential returns per unit of risk. KBC GR is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  7,306  in KBC GR on December 20, 2024 and sell it today you would earn a total of  1,322  from holding KBC GR or generate 18.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

PULSION Medical Systems  vs.  KBC GR

PULSION Medical Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PULSION Medical Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, PULSION Medical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

KBC GR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC GR are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, KBC GR unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PULSION Medical and KBC GR

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

The idea behind PULSION Medical Systems and KBC GR 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.