Correlation Between Keepers Holdings and Puregold Price

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

By analyzing existing cross correlation between Keepers Holdings and Puregold Price Club, you can compare the effects of market volatilities on Keepers Holdings and Puregold Price 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 Keepers Holdings with a short position of Puregold Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keepers Holdings and Puregold Price.

Diversification Opportunities for Keepers Holdings and Puregold Price

0.65

Correlation Coefficient

Keepers Holdings  Puregold Price

Poor diversification

The 3 months correlation between Keepers and Puregold is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Keepers Holdings and Puregold Price Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puregold Price Club and Keepers Holdings 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 Keepers Holdings are associated (or correlated) with Puregold Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puregold Price Club has no effect on the direction of Keepers Holdings i.e., Keepers Holdings and Puregold Price go up and down completely randomly.

Pair Corralation between Keepers Holdings and Puregold Price

Assuming the 90 days trading horizon Keepers Holdings is expected to generate 1.06 times less return on investment than Puregold Price. But when comparing it to its historical volatility, Keepers Holdings is 1.35 times less risky than Puregold Price. It trades about 0.07 of its potential returns per unit of risk. Puregold Price Club is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,910  in Puregold Price Club on September 5, 2024 and sell it today you would earn a total of  175.00  from holding Puregold Price Club or generate 6.01% return on investment over 90 days.

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

Keepers Holdings  vs.  Puregold Price Club

Keepers Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Keepers Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Keepers Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Puregold Price Club

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Puregold Price Club are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Puregold Price may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Keepers Holdings and Puregold Price

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

The idea behind Keepers Holdings and Puregold Price Club 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 Global Correlations module to find global opportunities by holding instruments from different markets.