Correlation Between Sacks Parente and Kenon Holdings

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

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

Diversification Opportunities for Sacks Parente and Kenon Holdings

0.09

Correlation Coefficient

Sacks Parente  Kenon Holdings

Significant diversification

The 3 months correlation between Sacks and Kenon is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sacks Parente Golf, and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings and Sacks Parente 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 Sacks Parente Golf, are associated (or correlated) with Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Sacks Parente i.e., Sacks Parente and Kenon Holdings go up and down completely randomly.

Pair Corralation between Sacks Parente and Kenon Holdings

Given the investment horizon of 90 days Sacks Parente Golf, is expected to generate 11.06 times more return on investment than Kenon Holdings. However, Sacks Parente is 11.06 times more volatile than Kenon Holdings. It trades about 0.01 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.0 per unit of risk. If you would invest  36.00  in Sacks Parente Golf, on December 27, 2024 and sell it today you would lose (26.00) from holding Sacks Parente Golf, or give up 72.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

Sacks Parente Golf,  vs.  Kenon Holdings

Sacks Parente Golf,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sacks Parente Golf, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unfluctuating technical and fundamental indicators, Sacks Parente exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kenon Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kenon Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Kenon Holdings is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sacks Parente and Kenon Holdings

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

The idea behind Sacks Parente Golf, and Kenon 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.