Correlation Between Kinaxis and Rand Worldwide

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

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

Diversification Opportunities for Kinaxis and Rand Worldwide

-0.64

Correlation Coefficient

Kinaxis  Rand Worldwide

Excellent diversification

The 3 months correlation between Kinaxis and Rand is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kinaxis and Rand Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Worldwide and Kinaxis 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 Kinaxis are associated (or correlated) with Rand Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Worldwide has no effect on the direction of Kinaxis i.e., Kinaxis and Rand Worldwide go up and down completely randomly.

Pair Corralation between Kinaxis and Rand Worldwide

Assuming the 90 days horizon Kinaxis is expected to generate 0.5 times more return on investment than Rand Worldwide. However, Kinaxis is 1.99 times less risky than Rand Worldwide. It trades about 0.22 of its potential returns per unit of risk. Rand Worldwide is currently generating about -0.05 per unit of risk. If you would invest  12,647  in Kinaxis on April 25, 2025 and sell it today you would earn a total of  2,223  from holding Kinaxis or generate 17.58% return on investment over 90 days.

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

Kinaxis  vs.  Rand Worldwide

Kinaxis

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinaxis are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Kinaxis reported solid returns over the last few months and may actually be approaching a breakup point.

Rand Worldwide

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rand Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Kinaxis and Rand Worldwide

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

The idea behind Kinaxis and Rand Worldwide 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 Anywhere module to track or share privately all of your investments from the convenience of any device.