Correlation Between Kusama and ABL

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

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

Diversification Opportunities for Kusama and ABL

0.38

Correlation Coefficient

Kusama  ABL

Weak diversification

The 3 months correlation between Kusama and ABL is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kusama and ABL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABL and Kusama 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 Kusama are associated (or correlated) with ABL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABL has no effect on the direction of Kusama i.e., Kusama and ABL go up and down completely randomly.

Pair Corralation between Kusama and ABL

If you would invest  2,307  in Kusama on January 30, 2024 and sell it today you would earn a total of  665.00  from holding Kusama or generate 28.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.78%
Values	Daily Returns

Kusama  vs.  ABL

Kusama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kusama has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's primary indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for Kusama shareholders.

ABL

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kusama and ABL

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

The idea behind Kusama and ABL 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.