Correlation Between Kinaxis and Amana Developing
Can any of the company-specific risk be diversified away by investing in both Kinaxis and Amana Developing 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 Kinaxis and Amana Developing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinaxis and Amana Developing World, you can compare the effects of market volatilities on Kinaxis and Amana Developing 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 Kinaxis with a short position of Amana Developing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinaxis and Amana Developing.
Diversification Opportunities for Kinaxis and Amana Developing
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinaxis and Amana is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kinaxis and Amana Developing World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amana Developing World and Kinaxis 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 Kinaxis are associated (or correlated) with Amana Developing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amana Developing World has no effect on the direction of Kinaxis i.e., Kinaxis and Amana Developing go up and down completely randomly.
Pair Corralation between Kinaxis and Amana Developing
Assuming the 90 days trading horizon Kinaxis is expected to generate 1.9 times more return on investment than Amana Developing. However, Kinaxis is 1.9 times more volatile than Amana Developing World. It trades about 0.04 of its potential returns per unit of risk. Amana Developing World is currently generating about -0.29 per unit of risk. If you would invest 15,033 in Kinaxis on January 26, 2024 and sell it today you would earn a total of 138.00 from holding Kinaxis or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinaxis vs. Amana Developing World
Performance |
| Timeline |
| Kinaxis |
| Amana Developing World |
Kinaxis and Amana Developing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinaxis and Amana Developing
The main advantage of trading using opposite Kinaxis and Amana Developing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinaxis position performs unexpectedly, Amana Developing 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 Amana Developing will offset losses from the drop in Amana Developing's long position.The idea behind Kinaxis and Amana Developing World 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.| Amana Developing vs. Amana Income Fund | Amana Developing vs. Amana Growth Fund | Amana Developing vs. Amana Participation Fund | Amana Developing vs. HUMANA INC |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |