Correlation Between LEENO Industrial and Kmw
Can any of the company-specific risk be diversified away by investing in both LEENO Industrial and Kmw 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 LEENO Industrial and Kmw into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEENO Industrial and Kmw Inc, you can compare the effects of market volatilities on LEENO Industrial and Kmw 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 LEENO Industrial with a short position of Kmw. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEENO Industrial and Kmw.
Diversification Opportunities for LEENO Industrial and Kmw
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LEENO and Kmw is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding LEENO Industrial and Kmw Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmw Inc and LEENO Industrial 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 LEENO Industrial are associated (or correlated) with Kmw. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmw Inc has no effect on the direction of LEENO Industrial i.e., LEENO Industrial and Kmw go up and down completely randomly.
Pair Corralation between LEENO Industrial and Kmw
Assuming the 90 days trading horizon LEENO Industrial is expected to generate 0.74 times more return on investment than Kmw. However, LEENO Industrial is 1.34 times less risky than Kmw. It trades about 0.02 of its potential returns per unit of risk. Kmw Inc is currently generating about -0.01 per unit of risk. If you would invest 14,768,500 in LEENO Industrial on August 29, 2024 and sell it today you would earn a total of 951,500 from holding LEENO Industrial or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LEENO Industrial vs. Kmw Inc
Performance |
| Timeline |
| LEENO Industrial |
| Kmw Inc |
LEENO Industrial and Kmw Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEENO Industrial and Kmw
The main advantage of trading using opposite LEENO Industrial and Kmw positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEENO Industrial position performs unexpectedly, Kmw 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 Kmw will offset losses from the drop in Kmw's long position.| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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