Correlation Between White Pearl and Goodbye Kansas

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

By analyzing existing cross correlation between White Pearl Technology and Goodbye Kansas Group, you can compare the effects of market volatilities on White Pearl and Goodbye Kansas 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 White Pearl with a short position of Goodbye Kansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of White Pearl and Goodbye Kansas.

Diversification Opportunities for White Pearl and Goodbye Kansas

0.16

Correlation Coefficient

White Pearl  Goodbye Kansas

Average diversification

The 3 months correlation between White and Goodbye is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding White Pearl Technology and Goodbye Kansas Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodbye Kansas Group and White Pearl 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 White Pearl Technology are associated (or correlated) with Goodbye Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodbye Kansas Group has no effect on the direction of White Pearl i.e., White Pearl and Goodbye Kansas go up and down completely randomly.

Pair Corralation between White Pearl and Goodbye Kansas

Assuming the 90 days trading horizon White Pearl is expected to generate 4.25 times less return on investment than Goodbye Kansas. But when comparing it to its historical volatility, White Pearl Technology is 2.25 times less risky than Goodbye Kansas. It trades about 0.09 of its potential returns per unit of risk. Goodbye Kansas Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  145.00  in Goodbye Kansas Group on December 28, 2024 and sell it today you would earn a total of  163.00  from holding Goodbye Kansas Group or generate 112.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

White Pearl Technology  vs.  Goodbye Kansas Group

White Pearl Technology

Risk-Adjusted Performance

OK

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

Goodbye Kansas Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goodbye Kansas Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward-looking signals, Goodbye Kansas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with White Pearl and Goodbye Kansas

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

The idea behind White Pearl Technology and Goodbye Kansas Group 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 Managers module to screen money managers from public funds and ETFs managed around the world.