Correlation Between KTBST Mixed and Micro Leasing

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

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

Diversification Opportunities for KTBST Mixed and Micro Leasing

0.08

Correlation Coefficient

KTBST Mixed  Micro Leasing

Significant diversification

The 3 months correlation between KTBST and Micro is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding KTBST Mixed Leasehold and Micro Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micro Leasing Public and KTBST Mixed 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 KTBST Mixed Leasehold are associated (or correlated) with Micro Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micro Leasing Public has no effect on the direction of KTBST Mixed i.e., KTBST Mixed and Micro Leasing go up and down completely randomly.

Pair Corralation between KTBST Mixed and Micro Leasing

Assuming the 90 days trading horizon KTBST Mixed Leasehold is expected to generate 0.29 times more return on investment than Micro Leasing. However, KTBST Mixed Leasehold is 3.48 times less risky than Micro Leasing. It trades about 0.0 of its potential returns per unit of risk. Micro Leasing Public is currently generating about -0.2 per unit of risk. If you would invest  638.00  in KTBST Mixed Leasehold on September 16, 2024 and sell it today you would lose (3.00) from holding KTBST Mixed Leasehold or give up 0.47% of portfolio value over 90 days.

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

KTBST Mixed Leasehold  vs.  Micro Leasing Public

KTBST Mixed Leasehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KTBST Mixed Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, KTBST Mixed is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Micro Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Micro Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KTBST Mixed and Micro Leasing

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

The idea behind KTBST Mixed Leasehold and Micro Leasing Public 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.