Correlation Between KBL Merger and Icahn Enterprises

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Can any of the company-specific risk be diversified away by investing in both KBL Merger and Icahn Enterprises 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 KBL Merger and Icahn Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBL Merger Corp and Icahn Enterprises LP, you can compare the effects of market volatilities on KBL Merger and Icahn Enterprises 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 KBL Merger with a short position of Icahn Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBL Merger and Icahn Enterprises.

Diversification Opportunities for KBL Merger and Icahn Enterprises

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between KBL Merger and Icahn Enterprises

If you would invest (100.00) in KBL Merger Corp on December 30, 2023 and sell it today you would earn a total of  100.00  from holding KBL Merger Corp or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

KBL Merger Corp  vs.  Icahn Enterprises LP

 Performance 
       Timeline  
KBL Merger Corp 

Risk-Adjusted Performance

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

Risk-Adjusted Performance

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High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Icahn Enterprises LP are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Icahn Enterprises is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

KBL Merger and Icahn Enterprises Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KBL Merger and Icahn Enterprises

The main advantage of trading using opposite KBL Merger and Icahn Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBL Merger position performs unexpectedly, Icahn Enterprises 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 Icahn Enterprises will offset losses from the drop in Icahn Enterprises' long position.
The idea behind KBL Merger Corp and Icahn Enterprises LP 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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