Correlation Between KICK and DLT

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

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

Diversification Opportunities for KICK and DLT

0.0

Correlation Coefficient

KICK  DLT

Pay attention - limited upside

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

Pair Corralation between KICK and DLT

If you would invest  0.03  in DLT on September 2, 2024 and sell it today you would earn a total of  0.02  from holding DLT or generate 67.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.52%
Values	Daily Returns

KICK  vs.  DLT

KICK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KICK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, KICK is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

DLT

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DLT are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, DLT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KICK and DLT

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

The idea behind KICK and DLT 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.

Check out your portfolio center.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.