Correlation Between Kirklands and Envela Corp

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

Diversification Opportunities for Kirklands and Envela Corp

0.43
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Kirklands and Envela is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kirklands and Envela Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envela Corp and Kirklands 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 Kirklands are associated (or correlated) with Envela Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envela Corp has no effect on the direction of Kirklands i.e., Kirklands and Envela Corp go up and down completely randomly.

Pair Corralation between Kirklands and Envela Corp

Given the investment horizon of 90 days Kirklands is expected to under-perform the Envela Corp. In addition to that, Kirklands is 1.58 times more volatile than Envela Corp. It trades about -0.01 of its total potential returns per unit of risk. Envela Corp is currently generating about 0.02 per unit of volatility. If you would invest  458.00  in Envela Corp on June 30, 2022 and sell it today you would earn a total of  59.00  from holding Envela Corp or generate 12.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Kirklands  vs.  Envela Corp

 Performance (%) 
       Timeline  
Kirklands 
Kirklands Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kirklands are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Kirklands may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Kirklands Price Channel

Envela Corp 
Envela Performance
0 of 100
Over the last 90 days Envela Corp 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 essential indicators remain somewhat strong which may send shares a bit higher in October 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Envela Price Channel

Kirklands and Envela Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kirklands and Envela Corp

The main advantage of trading using opposite Kirklands and Envela Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirklands position performs unexpectedly, Envela Corp 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 Envela Corp will offset losses from the drop in Envela Corp's long position.
Kirklands vs. Clearwater Paper Corp
The idea behind Kirklands and Envela Corp 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.
Envela Corp vs. Kibush Capital Corp
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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