Correlation Between Kenon Holdings and Nextgen

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

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

Diversification Opportunities for Kenon Holdings and Nextgen

0.0

Correlation Coefficient

Kenon Holdings  Nextgen

Pay attention - limited upside

The 3 months correlation between Kenon and Nextgen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and Nextgen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen and Kenon 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 Kenon Holdings are associated (or correlated) with Nextgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and Nextgen go up and down completely randomly.

Pair Corralation between Kenon Holdings and Nextgen

If you would invest  0.00  in Kenon Holdings on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Kenon Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.13%
Values	Daily Returns

Kenon Holdings  vs.  Nextgen

Kenon Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nextgen

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kenon Holdings and Nextgen

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

The idea behind Kenon Holdings and Nextgen 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.