Correlation Between KRAKATAU STEEL and Nutrien
Can any of the company-specific risk be diversified away by investing in both KRAKATAU STEEL and Nutrien 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 KRAKATAU STEEL and Nutrien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KRAKATAU STEEL B and Nutrien, you can compare the effects of market volatilities on KRAKATAU STEEL and Nutrien 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 KRAKATAU STEEL with a short position of Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRAKATAU STEEL and Nutrien.
Diversification Opportunities for KRAKATAU STEEL and Nutrien
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KRAKATAU and Nutrien is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding KRAKATAU STEEL B and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien and KRAKATAU STEEL 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 KRAKATAU STEEL B are associated (or correlated) with Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of KRAKATAU STEEL i.e., KRAKATAU STEEL and Nutrien go up and down completely randomly.
Pair Corralation between KRAKATAU STEEL and Nutrien
If you would invest 4,583 in Nutrien on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Nutrien or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KRAKATAU STEEL B vs. Nutrien
Performance |
| Timeline |
| KRAKATAU STEEL B |
| Nutrien |
KRAKATAU STEEL and Nutrien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRAKATAU STEEL and Nutrien
The main advantage of trading using opposite KRAKATAU STEEL and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRAKATAU STEEL position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien's long position.| KRAKATAU STEEL vs. Apple Inc | KRAKATAU STEEL vs. Apple Inc | KRAKATAU STEEL vs. Apple Inc | KRAKATAU STEEL vs. Apple Inc |
| Nutrien vs. Tianjin Capital Environmental | Nutrien vs. KRAKATAU STEEL B | Nutrien vs. Perma Fix Environmental Services | Nutrien vs. Tradeweb Markets |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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