Correlation Between Square and KASPIKZ (SPGDR

Can any of the company-specific risk be diversified away by investing in both Square and KASPIKZ (SPGDR 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 Square and KASPIKZ (SPGDR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Square Inc and KASPIKZ 1, you can compare the effects of market volatilities on Square and KASPIKZ (SPGDR 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 Square with a short position of KASPIKZ (SPGDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Square and KASPIKZ (SPGDR.

Diversification Opportunities for Square and KASPIKZ (SPGDR

0.21

Correlation Coefficient

Square  KASPIKZ (SPGDR

Modest diversification

The 3 months correlation between Square and KASPIKZ is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Square Inc and KASPIKZ 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KASPIKZ (SPGDR and Square 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 Square Inc are associated (or correlated) with KASPIKZ (SPGDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KASPIKZ (SPGDR has no effect on the direction of Square i.e., Square and KASPIKZ (SPGDR go up and down completely randomly.

Pair Corralation between Square and KASPIKZ (SPGDR

Assuming the 90 days horizon Square Inc is expected to under-perform the KASPIKZ (SPGDR. In addition to that, Square is 1.58 times more volatile than KASPIKZ 1. It trades about -0.16 of its total potential returns per unit of risk. KASPIKZ 1 is currently generating about -0.03 per unit of volatility. If you would invest  9,300  in KASPIKZ 1 on December 27, 2024 and sell it today you would lose (500.00) from holding KASPIKZ 1 or give up 5.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Square Inc  vs.  KASPIKZ 1

Square Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Square Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

KASPIKZ (SPGDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days KASPIKZ 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KASPIKZ (SPGDR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Square and KASPIKZ (SPGDR

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

The idea behind Square Inc and KASPIKZ 1 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.