Correlation Between Kelly Strategic and ALPS

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

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

Diversification Opportunities for Kelly Strategic and ALPS

-0.3

Correlation Coefficient

Kelly Strategic  ALPS

Very good diversification

The 3 months correlation between Kelly and ALPS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Strategic Management and ALPS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPS and Kelly Strategic 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 Kelly Strategic Management are associated (or correlated) with ALPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPS has no effect on the direction of Kelly Strategic i.e., Kelly Strategic and ALPS go up and down completely randomly.

Pair Corralation between Kelly Strategic and ALPS

If you would invest  2,547  in ALPS on September 28, 2024 and sell it today you would earn a total of  42.00  from holding ALPS or generate 1.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

Kelly Strategic Management  vs.  ALPS

Kelly Strategic Mana

Risk-Adjusted Performance

0 of 100

Very Weak

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

ALPS

Risk-Adjusted Performance

0 of 100

OK

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

Pair Trading with Kelly Strategic and ALPS

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

The idea behind Kelly Strategic Management and ALPS 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 Transaction History module to view history of all your transactions and understand their impact on performance.