Correlation Between Kmw and LEENO Industrial
Can any of the company-specific risk be diversified away by investing in both Kmw and LEENO Industrial 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 Kmw and LEENO Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kmw Inc and LEENO Industrial, you can compare the effects of market volatilities on Kmw and LEENO Industrial 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 Kmw with a short position of LEENO Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kmw and LEENO Industrial.
Diversification Opportunities for Kmw and LEENO Industrial
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kmw and LEENO is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kmw Inc and LEENO Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEENO Industrial and Kmw 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 Kmw Inc are associated (or correlated) with LEENO Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEENO Industrial has no effect on the direction of Kmw i.e., Kmw and LEENO Industrial go up and down completely randomly.
Pair Corralation between Kmw and LEENO Industrial
Assuming the 90 days trading horizon Kmw Inc is expected to under-perform the LEENO Industrial. In addition to that, Kmw is 1.15 times more volatile than LEENO Industrial. It trades about -0.01 of its total potential returns per unit of risk. LEENO Industrial is currently generating about 0.02 per unit of volatility. If you would invest 15,093,600 in LEENO Industrial on August 29, 2024 and sell it today you would earn a total of 626,400 from holding LEENO Industrial or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kmw Inc vs. LEENO Industrial
Performance |
| Timeline |
| Kmw Inc |
| LEENO Industrial |
Kmw and LEENO Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kmw and LEENO Industrial
The main advantage of trading using opposite Kmw and LEENO Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kmw position performs unexpectedly, LEENO Industrial 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 LEENO Industrial will offset losses from the drop in LEENO Industrial's long position.The idea behind Kmw Inc and LEENO Industrial 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.| LEENO Industrial vs. Daou Data Corp | LEENO Industrial vs. Busan Industrial Co | LEENO Industrial vs. Busan Ind | LEENO Industrial vs. Shinhan WTI Futures |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |