Correlation Between KFA Value and Militia LongShort
Can any of the company-specific risk be diversified away by investing in both KFA Value and Militia LongShort 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 KFA Value and Militia LongShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KFA Value Line and Militia LongShort Equity, you can compare the effects of market volatilities on KFA Value and Militia LongShort 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 KFA Value with a short position of Militia LongShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of KFA Value and Militia LongShort.
Diversification Opportunities for KFA Value and Militia LongShort
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KFA and Militia is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding KFA Value Line and Militia LongShort Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Militia LongShort Equity and KFA Value 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 KFA Value Line are associated (or correlated) with Militia LongShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Militia LongShort Equity has no effect on the direction of KFA Value i.e., KFA Value and Militia LongShort go up and down completely randomly.
Pair Corralation between KFA Value and Militia LongShort
Given the investment horizon of 90 days KFA Value is expected to generate 2.13 times less return on investment than Militia LongShort. But when comparing it to its historical volatility, KFA Value Line is 1.2 times less risky than Militia LongShort. It trades about 0.05 of its potential returns per unit of risk. Militia LongShort Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,158 in Militia LongShort Equity on August 18, 2025 and sell it today you would earn a total of 138.00 from holding Militia LongShort Equity or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KFA Value Line vs. Militia LongShort Equity
Performance |
| Timeline |
| KFA Value Line |
| Militia LongShort Equity |
KFA Value and Militia LongShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KFA Value and Militia LongShort
The main advantage of trading using opposite KFA Value and Militia LongShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KFA Value position performs unexpectedly, Militia LongShort 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 Militia LongShort will offset losses from the drop in Militia LongShort's long position.| KFA Value vs. Nushares ETF Trust | KFA Value vs. ProShares Ultra SmallCap600 | KFA Value vs. iShares MSCI Finland | KFA Value vs. Global X SP |
| Militia LongShort vs. Unlimited HFND Multi Strategy | Militia LongShort vs. Direxion Daily Retail | Militia LongShort vs. Hartford Multifactor Small | Militia LongShort vs. VanEck Indonesia Index |
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 the Commodity Directory module to find actively traded commodities issued by global exchanges.
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