Correlation Between COFCO Joycome and KENNAMETAL INC
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and KENNAMETAL INC 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 COFCO Joycome and KENNAMETAL INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and KENNAMETAL INC, you can compare the effects of market volatilities on COFCO Joycome and KENNAMETAL INC 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 COFCO Joycome with a short position of KENNAMETAL INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and KENNAMETAL INC.
Diversification Opportunities for COFCO Joycome and KENNAMETAL INC
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between COFCO and KENNAMETAL is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and KENNAMETAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENNAMETAL INC and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with KENNAMETAL INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENNAMETAL INC has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and KENNAMETAL INC go up and down completely randomly.
Pair Corralation between COFCO Joycome and KENNAMETAL INC
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the KENNAMETAL INC. In addition to that, COFCO Joycome is 1.87 times more volatile than KENNAMETAL INC. It trades about -0.02 of its total potential returns per unit of risk. KENNAMETAL INC is currently generating about 0.01 per unit of volatility. If you would invest 2,338 in KENNAMETAL INC on October 16, 2024 and sell it today you would lose (18.00) from holding KENNAMETAL INC or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. KENNAMETAL INC
Performance |
| Timeline |
| COFCO Joycome Foods |
| KENNAMETAL INC |
COFCO Joycome and KENNAMETAL INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and KENNAMETAL INC
The main advantage of trading using opposite COFCO Joycome and KENNAMETAL INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, KENNAMETAL INC 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 KENNAMETAL INC will offset losses from the drop in KENNAMETAL INC's long position.| COFCO Joycome vs. SBI Insurance Group | COFCO Joycome vs. Tokyu Construction Co | COFCO Joycome vs. Granite Construction | COFCO Joycome vs. TITAN MACHINERY |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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