Correlation Between Kodiak Copper and NamSys

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

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

Diversification Opportunities for Kodiak Copper and NamSys

0.2

Correlation Coefficient

Kodiak Copper  NamSys

Modest diversification

The 3 months correlation between Kodiak and NamSys is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Copper Corp and NamSys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NamSys Inc and Kodiak Copper 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 Kodiak Copper Corp are associated (or correlated) with NamSys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NamSys Inc has no effect on the direction of Kodiak Copper i.e., Kodiak Copper and NamSys go up and down completely randomly.

Pair Corralation between Kodiak Copper and NamSys

Assuming the 90 days horizon Kodiak Copper Corp is expected to under-perform the NamSys. In addition to that, Kodiak Copper is 1.43 times more volatile than NamSys Inc. It trades about 0.0 of its total potential returns per unit of risk. NamSys Inc is currently generating about 0.04 per unit of volatility. If you would invest  105.00  in NamSys Inc on August 31, 2024 and sell it today you would earn a total of  5.00  from holding NamSys Inc or generate 4.76% return on investment over 90 days.

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

Kodiak Copper Corp  vs.  NamSys Inc

Kodiak Copper Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

NamSys Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NamSys Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, NamSys may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Kodiak Copper and NamSys

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

The idea behind Kodiak Copper Corp and NamSys Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..