Correlation Between KDA and Vitalhub Corp

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

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

Diversification Opportunities for KDA and Vitalhub Corp

-0.44

Correlation Coefficient

KDA  Vitalhub Corp

Very good diversification

The 3 months correlation between KDA and Vitalhub is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding KDA Group and Vitalhub Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitalhub Corp 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 Vitalhub Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitalhub Corp has no effect on the direction of KDA i.e., KDA and Vitalhub Corp go up and down completely randomly.

Pair Corralation between KDA and Vitalhub Corp

Assuming the 90 days horizon KDA is expected to generate 1.9 times less return on investment than Vitalhub Corp. In addition to that, KDA is 2.46 times more volatile than Vitalhub Corp. It trades about 0.05 of its total potential returns per unit of risk. Vitalhub Corp is currently generating about 0.23 per unit of volatility. If you would invest  796.00  in Vitalhub Corp on September 2, 2024 and sell it today you would earn a total of  333.00  from holding Vitalhub Corp or generate 41.83% return on investment over 90 days.

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

KDA Group  vs.  Vitalhub Corp

KDA Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KDA Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, KDA showed solid returns over the last few months and may actually be approaching a breakup point.

Vitalhub Corp

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vitalhub Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Vitalhub Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KDA and Vitalhub Corp

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

The idea behind KDA Group and Vitalhub Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.