Correlation Between Kaufman Et and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Kaufman Et and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Litigation Capital.
Diversification Opportunities for Kaufman Et and Litigation Capital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaufman and Litigation is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Kaufman Et i.e., Kaufman Et and Litigation Capital go up and down completely randomly.
Pair Corralation between Kaufman Et and Litigation Capital
Assuming the 90 days trading horizon Kaufman Et is expected to generate 1.58 times less return on investment than Litigation Capital. But when comparing it to its historical volatility, Kaufman Et Broad is 1.32 times less risky than Litigation Capital. It trades about 0.05 of its potential returns per unit of risk. Litigation Capital Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,769 in Litigation Capital Management on August 25, 2024 and sell it today you would earn a total of 4,806 from holding Litigation Capital Management or generate 71.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kaufman Et Broad vs. Litigation Capital Management
Performance |
| Timeline |
| Kaufman Et Broad |
| Litigation Capital |
Kaufman Et and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Et and Litigation Capital
The main advantage of trading using opposite Kaufman Et and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Kaufman Et vs. Samsung Electronics Co | Kaufman Et vs. Samsung Electronics Co | Kaufman Et vs. Hyundai Motor | Kaufman Et vs. Toyota Motor Corp |
| Litigation Capital vs. Catalyst Media Group | Litigation Capital vs. Oncimmune Holdings plc | Litigation Capital vs. Invesco Health Care | Litigation Capital vs. Coor Service Management |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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