Correlation Between Kelt Exploration and AIXTRON SE

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

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

Diversification Opportunities for Kelt Exploration and AIXTRON SE

0.7

Correlation Coefficient

Kelt Exploration  AIXTRON SE

Poor diversification

The 3 months correlation between Kelt and AIXTRON is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and AIXTRON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIXTRON SE and Kelt Exploration 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 Kelt Exploration are associated (or correlated) with AIXTRON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIXTRON SE has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and AIXTRON SE go up and down completely randomly.

Pair Corralation between Kelt Exploration and AIXTRON SE

Assuming the 90 days horizon Kelt Exploration is expected to generate 0.98 times more return on investment than AIXTRON SE. However, Kelt Exploration is 1.02 times less risky than AIXTRON SE. It trades about 0.15 of its potential returns per unit of risk. AIXTRON SE is currently generating about 0.08 per unit of risk. If you would invest  403.00  in Kelt Exploration on May 5, 2025 and sell it today you would earn a total of  121.00  from holding Kelt Exploration or generate 30.02% return on investment over 90 days.

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

Kelt Exploration  vs.  AIXTRON SE

Kelt Exploration

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kelt Exploration are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Kelt Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

AIXTRON SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AIXTRON SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, AIXTRON SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kelt Exploration and AIXTRON SE

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

The idea behind Kelt Exploration and AIXTRON SE 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.