Correlation Between Kaufman Et and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Abingdon Health 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 Kaufman Et and Abingdon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Et Broad and Abingdon Health Plc, you can compare the effects of market volatilities on Kaufman Et and Abingdon Health 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 Kaufman Et with a short position of Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Abingdon Health.
Diversification Opportunities for Kaufman Et and Abingdon Health
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaufman and Abingdon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Kaufman Et i.e., Kaufman Et and Abingdon Health go up and down completely randomly.
Pair Corralation between Kaufman Et and Abingdon Health
Assuming the 90 days trading horizon Kaufman Et is expected to generate 1.93 times less return on investment than Abingdon Health. But when comparing it to its historical volatility, Kaufman Et Broad is 2.42 times less risky than Abingdon Health. It trades about 0.11 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 775.00 in Abingdon Health Plc on October 11, 2024 and sell it today you would earn a total of 25.00 from holding Abingdon Health Plc or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Kaufman Et Broad vs. Abingdon Health Plc
Performance |
| Timeline |
| Kaufman Et Broad |
| Abingdon Health Plc |
Kaufman Et and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Et and Abingdon Health
The main advantage of trading using opposite Kaufman Et and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Kaufman Et vs. Aptitude Software Group | Kaufman Et vs. Coor Service Management | Kaufman Et vs. Technicolor | Kaufman Et vs. Take Two Interactive Software |
| Abingdon Health vs. Kaufman Et Broad | Abingdon Health vs. One Media iP | Abingdon Health vs. Live Nation Entertainment | Abingdon Health vs. Intermediate Capital Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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