Correlation Between Chia and Kwesst Micro

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

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

Diversification Opportunities for Chia and Kwesst Micro

-0.26

Correlation Coefficient

Chia  Kwesst Micro

Very good diversification

The 3 months correlation between Chia and Kwesst is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chia and Kwesst Micro Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwesst Micro Systems and Chia 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 Chia are associated (or correlated) with Kwesst Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwesst Micro Systems has no effect on the direction of Chia i.e., Chia and Kwesst Micro go up and down completely randomly.

Pair Corralation between Chia and Kwesst Micro

Assuming the 90 days trading horizon Chia is expected to generate 0.53 times more return on investment than Kwesst Micro. However, Chia is 1.89 times less risky than Kwesst Micro. It trades about -0.02 of its potential returns per unit of risk. Kwesst Micro Systems is currently generating about -0.02 per unit of risk. If you would invest  4,501  in Chia on October 25, 2024 and sell it today you would lose (2,571) from holding Chia or give up 57.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.12%
Values	Daily Returns

Chia  vs.  Kwesst Micro Systems

Chia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kwesst Micro Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kwesst Micro Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Chia and Kwesst Micro

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

The idea behind Chia and Kwesst Micro Systems 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.