Correlation Between Centrifuge and Kamino

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

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

Diversification Opportunities for Centrifuge and Kamino

0.0

Correlation Coefficient

Centrifuge  Kamino

Pay attention - limited upside

The 3 months correlation between Centrifuge and Kamino is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Centrifuge and Kamino in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamino and Centrifuge 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 Centrifuge are associated (or correlated) with Kamino. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamino has no effect on the direction of Centrifuge i.e., Centrifuge and Kamino go up and down completely randomly.

Pair Corralation between Centrifuge and Kamino

Assuming the 90 days trading horizon Centrifuge is expected to generate 36.58 times less return on investment than Kamino. But when comparing it to its historical volatility, Centrifuge is 23.48 times less risky than Kamino. It trades about 0.08 of its potential returns per unit of risk. Kamino is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  3.96  in Kamino on September 1, 2024 and sell it today you would earn a total of  11.04  from holding Kamino or generate 278.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Centrifuge  vs.  Kamino

Centrifuge

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Centrifuge are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Centrifuge exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kamino

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kamino are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Kamino exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centrifuge and Kamino

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

The idea behind Centrifuge and Kamino 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.