Correlation Between Koss and V

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

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

Diversification Opportunities for Koss and V

0.0

Correlation Coefficient

Koss  V

Pay attention - limited upside

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

Pair Corralation between Koss and V

Given the investment horizon of 90 days Koss Corporation is expected to generate 2.08 times more return on investment than V. However, Koss is 2.08 times more volatile than V Group. It trades about 0.06 of its potential returns per unit of risk. V Group is currently generating about -0.01 per unit of risk. If you would invest  379.00  in Koss Corporation on September 12, 2024 and sell it today you would earn a total of  343.00  from holding Koss Corporation or generate 90.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Koss Corp.  vs.  V Group

Koss

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Koss Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Koss is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

V Group

Risk-Adjusted Performance

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Very Weak

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

Pair Trading with Koss and V

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

The idea behind Koss Corporation and V Group 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.