Correlation Between Novartis and KBK Capital
Can any of the company-specific risk be diversified away by investing in both Novartis and KBK Capital 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 Novartis and KBK Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novartis AG ADR and KBK Capital Trust, you can compare the effects of market volatilities on Novartis and KBK Capital 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 Novartis with a short position of KBK Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novartis and KBK Capital.
Diversification Opportunities for Novartis and KBK Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Novartis and KBK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Novartis AG ADR and KBK Capital Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBK Capital Trust and Novartis 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 Novartis AG ADR are associated (or correlated) with KBK Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBK Capital Trust has no effect on the direction of Novartis i.e., Novartis and KBK Capital go up and down completely randomly.
Pair Corralation between Novartis and KBK Capital
If you would invest 9,573 in Novartis AG ADR on January 25, 2024 and sell it today you would earn a total of 155.00 from holding Novartis AG ADR or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Novartis AG ADR vs. KBK Capital Trust
Performance |
| Timeline |
| Novartis AG ADR |
| KBK Capital Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Novartis and KBK Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novartis and KBK Capital
The main advantage of trading using opposite Novartis and KBK Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novartis position performs unexpectedly, KBK Capital 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 KBK Capital will offset losses from the drop in KBK Capital's long position.| Novartis vs. Silver Spike Investment | Novartis vs. Alkermes Plc | Novartis vs. Eagle Pharmaceuticals | Novartis vs. Evotec SE ADR |
| KBK Capital vs. Chester Mining | KBK Capital vs. Universal Stainless Alloy | KBK Capital vs. Tianjin Capital Environmental | KBK Capital vs. US GoldMining Common |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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