Correlation Between Safe Orthopaedics and Kko International

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

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

Diversification Opportunities for Safe Orthopaedics and Kko International

-0.83

Correlation Coefficient

Safe Orthopaedics  Kko International

Pay attention - limited upside

The 3 months correlation between Safe and Kko is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Safe Orthopaedics SA and Kko International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kko International and Safe Orthopaedics 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 Safe Orthopaedics SA are associated (or correlated) with Kko International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kko International has no effect on the direction of Safe Orthopaedics i.e., Safe Orthopaedics and Kko International go up and down completely randomly.

Pair Corralation between Safe Orthopaedics and Kko International

Assuming the 90 days trading horizon Safe Orthopaedics SA is expected to under-perform the Kko International. In addition to that, Safe Orthopaedics is 1.09 times more volatile than Kko International SA. It trades about -0.13 of its total potential returns per unit of risk. Kko International SA is currently generating about 0.2 per unit of volatility. If you would invest  4.68  in Kko International SA on September 24, 2024 and sell it today you would earn a total of  12.32  from holding Kko International SA or generate 263.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Safe Orthopaedics SA  vs.  Kko International SA

Safe Orthopaedics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safe Orthopaedics SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kko International

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kko International SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kko International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Safe Orthopaedics and Kko International

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

The idea behind Safe Orthopaedics SA and Kko International SA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.