Correlation Between Kaufman Et and Optima Health
Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Optima 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 Optima 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 Optima Health plc, you can compare the effects of market volatilities on Kaufman Et and Optima 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 Optima Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Optima Health.
Diversification Opportunities for Kaufman Et and Optima Health
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kaufman and Optima is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Optima Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optima 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 Optima Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optima Health plc has no effect on the direction of Kaufman Et i.e., Kaufman Et and Optima Health go up and down completely randomly.
Pair Corralation between Kaufman Et and Optima Health
Assuming the 90 days trading horizon Kaufman Et Broad is expected to generate 1.54 times more return on investment than Optima Health. However, Kaufman Et is 1.54 times more volatile than Optima Health plc. It trades about 0.03 of its potential returns per unit of risk. Optima Health plc is currently generating about -0.07 per unit of risk. If you would invest 2,459 in Kaufman Et Broad on October 16, 2024 and sell it today you would earn a total of 611.00 from holding Kaufman Et Broad or generate 24.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 15.29% |
| Values | Daily Returns |
Kaufman Et Broad vs. Optima Health plc
Performance |
| Timeline |
| Kaufman Et Broad |
| Optima Health plc |
Kaufman Et and Optima Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Et and Optima Health
The main advantage of trading using opposite Kaufman Et and Optima Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et position performs unexpectedly, Optima 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 Optima Health will offset losses from the drop in Optima Health's long position.| Kaufman Et vs. Europa Metals | Kaufman Et vs. Gamma Communications PLC | Kaufman Et vs. Cairo Communication SpA | Kaufman Et vs. Empire Metals Limited |
| Optima Health vs. FinecoBank SpA | Optima Health vs. TBC Bank Group | Optima Health vs. Metro Bank PLC | Optima Health vs. SoftBank Group Corp |
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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