Correlation Between Koios Beverage and Laird Superfood

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

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

Diversification Opportunities for Koios Beverage and Laird Superfood

-0.88

Correlation Coefficient

Koios Beverage  Laird Superfood

Pay attention - limited upside

The 3 months correlation between Koios and Laird is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Koios Beverage Corp and Laird Superfood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laird Superfood and Koios Beverage 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 Koios Beverage Corp are associated (or correlated) with Laird Superfood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laird Superfood has no effect on the direction of Koios Beverage i.e., Koios Beverage and Laird Superfood go up and down completely randomly.

Pair Corralation between Koios Beverage and Laird Superfood

Assuming the 90 days horizon Koios Beverage Corp is expected to generate 5.81 times more return on investment than Laird Superfood. However, Koios Beverage is 5.81 times more volatile than Laird Superfood. It trades about 0.12 of its potential returns per unit of risk. Laird Superfood is currently generating about 0.22 per unit of risk. If you would invest  16.00  in Koios Beverage Corp on September 15, 2024 and sell it today you would lose (4.00) from holding Koios Beverage Corp or give up 25.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Koios Beverage Corp  vs.  Laird Superfood

Koios Beverage Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Koios Beverage Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Koios Beverage reported solid returns over the last few months and may actually be approaching a breakup point.

Laird Superfood

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Laird Superfood are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Laird Superfood reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koios Beverage and Laird Superfood

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

The idea behind Koios Beverage Corp and Laird Superfood 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.