Correlation Between Mosaic and KS AG

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

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

Diversification Opportunities for Mosaic and KS AG

0.16

Correlation Coefficient

Mosaic  KS AG

Average diversification

The 3 months correlation between Mosaic and KPLUF is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and KS AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KS AG and Mosaic 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 The Mosaic are associated (or correlated) with KS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KS AG has no effect on the direction of Mosaic i.e., Mosaic and KS AG go up and down completely randomly.

Pair Corralation between Mosaic and KS AG

Considering the 90-day investment horizon The Mosaic is expected to generate 2.73 times more return on investment than KS AG. However, Mosaic is 2.73 times more volatile than KS AG. It trades about 0.08 of its potential returns per unit of risk. KS AG is currently generating about -0.29 per unit of risk. If you would invest  2,591  in The Mosaic on September 14, 2024 and sell it today you would earn a total of  86.00  from holding The Mosaic or generate 3.32% return on investment over 90 days.

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

The Mosaic  vs.  KS AG

Mosaic

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Mosaic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

KS AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KS AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KS AG is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mosaic and KS AG

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

The idea behind The Mosaic and KS AG 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.