Correlation Between KDA and Rogers Sugar

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

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

Diversification Opportunities for KDA and Rogers Sugar

0.33

Correlation Coefficient

KDA  Rogers Sugar

Weak diversification

The 3 months correlation between KDA and Rogers is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding KDA Group and Rogers Sugar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Sugar and KDA 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 KDA Group are associated (or correlated) with Rogers Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Sugar has no effect on the direction of KDA i.e., KDA and Rogers Sugar go up and down completely randomly.

Pair Corralation between KDA and Rogers Sugar

Assuming the 90 days horizon KDA is expected to generate 1.88 times less return on investment than Rogers Sugar. In addition to that, KDA is 4.97 times more volatile than Rogers Sugar. It trades about 0.01 of its total potential returns per unit of risk. Rogers Sugar is currently generating about 0.09 per unit of volatility. If you would invest  560.00  in Rogers Sugar on September 28, 2024 and sell it today you would earn a total of  34.00  from holding Rogers Sugar or generate 6.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

KDA Group  vs.  Rogers Sugar

KDA Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KDA Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, KDA is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Rogers Sugar

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rogers Sugar are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, Rogers Sugar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with KDA and Rogers Sugar

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

The idea behind KDA Group and Rogers Sugar 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.