Correlation Between Goodbye Kansas and Clinical Laserthermia

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

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

Diversification Opportunities for Goodbye Kansas and Clinical Laserthermia

-0.14

Correlation Coefficient

Goodbye Kansas  Clinical Laserthermia

Good diversification

The 3 months correlation between Goodbye and Clinical is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Goodbye Kansas Group and Clinical Laserthermia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clinical Laserthermia and Goodbye Kansas 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 Goodbye Kansas Group are associated (or correlated) with Clinical Laserthermia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clinical Laserthermia has no effect on the direction of Goodbye Kansas i.e., Goodbye Kansas and Clinical Laserthermia go up and down completely randomly.

Pair Corralation between Goodbye Kansas and Clinical Laserthermia

Assuming the 90 days trading horizon Goodbye Kansas Group is expected to generate 1.08 times more return on investment than Clinical Laserthermia. However, Goodbye Kansas is 1.08 times more volatile than Clinical Laserthermia Systems. It trades about 0.11 of its potential returns per unit of risk. Clinical Laserthermia Systems is currently generating about -0.04 per unit of risk. If you would invest  105.00  in Goodbye Kansas Group on September 17, 2024 and sell it today you would earn a total of  37.00  from holding Goodbye Kansas Group or generate 35.24% return on investment over 90 days.

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

Goodbye Kansas Group  vs.  Clinical Laserthermia Systems

Goodbye Kansas Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goodbye Kansas Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Goodbye Kansas unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clinical Laserthermia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clinical Laserthermia Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Goodbye Kansas and Clinical Laserthermia

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

The idea behind Goodbye Kansas Group and Clinical Laserthermia Systems 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.