Correlation Between Kaulin Mfg and Anderson Industrial
Can any of the company-specific risk be diversified away by investing in both Kaulin Mfg and Anderson Industrial 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 Kaulin Mfg and Anderson Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaulin Mfg and Anderson Industrial Corp, you can compare the effects of market volatilities on Kaulin Mfg and Anderson Industrial 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 Kaulin Mfg with a short position of Anderson Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaulin Mfg and Anderson Industrial.
Diversification Opportunities for Kaulin Mfg and Anderson Industrial
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaulin and Anderson is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kaulin Mfg and Anderson Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anderson Industrial Corp and Kaulin Mfg 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 Kaulin Mfg are associated (or correlated) with Anderson Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anderson Industrial Corp has no effect on the direction of Kaulin Mfg i.e., Kaulin Mfg and Anderson Industrial go up and down completely randomly.
Pair Corralation between Kaulin Mfg and Anderson Industrial
Assuming the 90 days trading horizon Kaulin Mfg is expected to generate 0.76 times more return on investment than Anderson Industrial. However, Kaulin Mfg is 1.31 times less risky than Anderson Industrial. It trades about -0.09 of its potential returns per unit of risk. Anderson Industrial Corp is currently generating about -0.28 per unit of risk. If you would invest 1,395 in Kaulin Mfg on October 25, 2024 and sell it today you would lose (40.00) from holding Kaulin Mfg or give up 2.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaulin Mfg vs. Anderson Industrial Corp
Performance |
| Timeline |
| Kaulin Mfg |
| Anderson Industrial Corp |
Kaulin Mfg and Anderson Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaulin Mfg and Anderson Industrial
The main advantage of trading using opposite Kaulin Mfg and Anderson Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaulin Mfg position performs unexpectedly, Anderson Industrial 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 Anderson Industrial will offset losses from the drop in Anderson Industrial's long position.| Kaulin Mfg vs. Tainan Enterprises Co | Kaulin Mfg vs. Nien Hsing Textile | Kaulin Mfg vs. De Licacy Industrial | Kaulin Mfg vs. Kwong Fong Industries |
| Anderson Industrial vs. Awea Mechantronic Co | Anderson Industrial vs. Lee Chi Enterprises | Anderson Industrial vs. Kaulin Mfg | Anderson Industrial vs. Gordon Auto Body |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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