Correlation Between Rand Worldwide and Kinaxis

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

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

Diversification Opportunities for Rand Worldwide and Kinaxis

-0.69

Correlation Coefficient

Rand Worldwide  Kinaxis

Excellent diversification

The 3 months correlation between Rand and Kinaxis is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Rand Worldwide and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Rand Worldwide 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 Rand Worldwide are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Rand Worldwide i.e., Rand Worldwide and Kinaxis go up and down completely randomly.

Pair Corralation between Rand Worldwide and Kinaxis

Given the investment horizon of 90 days Rand Worldwide is expected to under-perform the Kinaxis. In addition to that, Rand Worldwide is 2.05 times more volatile than Kinaxis. It trades about -0.03 of its total potential returns per unit of risk. Kinaxis is currently generating about 0.14 per unit of volatility. If you would invest  13,505  in Kinaxis on May 1, 2025 and sell it today you would earn a total of  1,360  from holding Kinaxis or generate 10.07% return on investment over 90 days.

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

Rand Worldwide  vs.  Kinaxis

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 fairly strong basic indicators, Rand Worldwide is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Kinaxis

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinaxis are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Kinaxis may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Rand Worldwide and Kinaxis

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

The idea behind Rand Worldwide and Kinaxis 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.