Correlation Between CARSALES and KTL GLOBAL

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

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

Diversification Opportunities for CARSALES and KTL GLOBAL

0.0

Correlation Coefficient

CARSALES  KTL GLOBAL

Pay attention - limited upside

The 3 months correlation between CARSALES and KTL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM and KTL GLOBAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTL GLOBAL and CARSALES 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 CARSALESCOM are associated (or correlated) with KTL GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTL GLOBAL has no effect on the direction of CARSALES i.e., CARSALES and KTL GLOBAL go up and down completely randomly.

Pair Corralation between CARSALES and KTL GLOBAL

If you would invest  2,280  in CARSALESCOM on September 5, 2024 and sell it today you would earn a total of  280.00  from holding CARSALESCOM or generate 12.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

CARSALESCOM  vs.  KTL GLOBAL

CARSALESCOM

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CARSALESCOM are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CARSALES exhibited solid returns over the last few months and may actually be approaching a breakup point.

KTL GLOBAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KTL GLOBAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, KTL GLOBAL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CARSALES and KTL GLOBAL

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

The idea behind CARSALESCOM and KTL GLOBAL 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.