Correlation Between Kaspien Holdings and ResMed

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Can any of the company-specific risk be diversified away by investing in both Kaspien Holdings and ResMed 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 Kaspien Holdings and ResMed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaspien Holdings and ResMed Inc, you can compare the effects of market volatilities on Kaspien Holdings and ResMed 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 Kaspien Holdings with a short position of ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaspien Holdings and ResMed.

Diversification Opportunities for Kaspien Holdings and ResMed

  Correlation Coefficient

Modest diversification

The 3 months correlation between Kaspien and ResMed is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kaspien Holdings and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc and Kaspien Holdings 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 Kaspien Holdings are associated (or correlated) with ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of Kaspien Holdings i.e., Kaspien Holdings and ResMed go up and down completely randomly.

Pair Corralation between Kaspien Holdings and ResMed

Given the investment horizon of 90 days Kaspien Holdings is expected to under-perform the ResMed. In addition to that, Kaspien Holdings is 2.78 times more volatile than ResMed Inc. It trades about -0.05 of its total potential returns per unit of risk. ResMed Inc is currently generating about 0.06 per unit of volatility. If you would invest  21,220  in ResMed Inc on September 8, 2022 and sell it today you would earn a total of  553.00  from holding ResMed Inc or generate 2.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Kaspien Holdings  vs.  ResMed Inc

 Performance (%) 
Kaspien Holdings 
Kaspien Performance
0 of 100
Over the last 90 days Kaspien Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2023. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Kaspien Price Channel

ResMed Inc 
ResMed Performance
0 of 100
Over the last 90 days ResMed Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, ResMed is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

ResMed Price Channel

Kaspien Holdings and ResMed Volatility Contrast

   Predicted Return Density   

Pair Trading with Kaspien Holdings and ResMed

The main advantage of trading using opposite Kaspien Holdings and ResMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaspien Holdings position performs unexpectedly, ResMed 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 ResMed will offset losses from the drop in ResMed's long position.
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The idea behind Kaspien Holdings and ResMed Inc 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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Check out your portfolio center. 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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