Correlation Between Movement and KAITO

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

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

Diversification Opportunities for Movement and KAITO

-0.58

Correlation Coefficient

Movement  KAITO

Excellent diversification

The 3 months correlation between Movement and KAITO is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Movement and KAITO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAITO and Movement 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 Movement are associated (or correlated) with KAITO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAITO has no effect on the direction of Movement i.e., Movement and KAITO go up and down completely randomly.

Pair Corralation between Movement and KAITO

Assuming the 90 days trading horizon Movement is expected to generate 1.84 times more return on investment than KAITO. However, Movement is 1.84 times more volatile than KAITO. It trades about 0.1 of its potential returns per unit of risk. KAITO is currently generating about -0.08 per unit of risk. If you would invest  15.00  in Movement on April 2, 2025 and sell it today you would earn a total of  2.00  from holding Movement or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Movement  vs.  KAITO

Movement

Risk-Adjusted Performance

Very Weak

Over the last 90 days Movement 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 fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for Movement shareholders.

KAITO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KAITO are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, KAITO exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Movement and KAITO

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

The idea behind Movement and KAITO 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.