Correlation Between SWK Holdings and Kuya Silver

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

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

Diversification Opportunities for SWK Holdings and Kuya Silver

0.01

Correlation Coefficient

SWK Holdings  Kuya Silver

Significant diversification

The 3 months correlation between SWK and Kuya is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding SWK Holdings and Kuya Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuya Silver and SWK Holdings 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 SWK Holdings are associated (or correlated) with Kuya Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuya Silver has no effect on the direction of SWK Holdings i.e., SWK Holdings and Kuya Silver go up and down completely randomly.

Pair Corralation between SWK Holdings and Kuya Silver

Assuming the 90 days horizon SWK Holdings is expected to generate 44.22 times less return on investment than Kuya Silver. But when comparing it to its historical volatility, SWK Holdings is 13.61 times less risky than Kuya Silver. It trades about 0.03 of its potential returns per unit of risk. Kuya Silver is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Kuya Silver on December 17, 2024 and sell it today you would earn a total of  4.00  from holding Kuya Silver or generate 22.22% return on investment over 90 days.

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

SWK Holdings  vs.  Kuya Silver

SWK Holdings

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SWK Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical indicators, SWK Holdings is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Kuya Silver

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kuya Silver are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kuya Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SWK Holdings and Kuya Silver

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

The idea behind SWK Holdings and Kuya Silver 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.