Correlation Between Kusama and KICK

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

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

Diversification Opportunities for Kusama and KICK

0.19

Correlation Coefficient

Kusama  KICK

Average diversification

The 3 months correlation between Kusama and KICK is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kusama and KICK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KICK and Kusama 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 Kusama are associated (or correlated) with KICK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KICK has no effect on the direction of Kusama i.e., Kusama and KICK go up and down completely randomly.

Pair Corralation between Kusama and KICK

If you would invest  3,593  in Kusama on January 24, 2024 and sell it today you would lose (308.00) from holding Kusama or give up 8.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Kusama  vs.  KICK

Kusama

Risk-Adjusted Performance

0 of 100

Very Weak

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

KICK

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kusama and KICK

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

The idea behind Kusama and KICK 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.