Correlation Between Goodbye Kansas and Humble Group

Can any of the company-specific risk be diversified away by investing in both Goodbye Kansas and Humble Group 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 Humble Group 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 Humble Group AB, you can compare the effects of market volatilities on Goodbye Kansas and Humble Group 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 Humble Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodbye Kansas and Humble Group.

Diversification Opportunities for Goodbye Kansas and Humble Group

-0.28

Correlation Coefficient

Goodbye Kansas  Humble Group

Very good diversification

The 3 months correlation between Goodbye and Humble is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Goodbye Kansas Group and Humble Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humble Group AB 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 Humble Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humble Group AB has no effect on the direction of Goodbye Kansas i.e., Goodbye Kansas and Humble Group go up and down completely randomly.

Pair Corralation between Goodbye Kansas and Humble Group

Assuming the 90 days trading horizon Goodbye Kansas Group is expected to generate 2.12 times more return on investment than Humble Group. However, Goodbye Kansas is 2.12 times more volatile than Humble Group AB. It trades about 0.11 of its potential returns per unit of risk. Humble Group AB is currently generating about 0.0 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.  Humble Group AB

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.

Humble Group AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Humble Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, Humble Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goodbye Kansas and Humble Group

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

The idea behind Goodbye Kansas Group and Humble Group AB 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.