Correlation Between IA FINANCIAL and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both IA FINANCIAL and KENEDIX OFFICE 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 IA FINANCIAL and KENEDIX OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IA FINANCIAL P and KENEDIX OFFICE INV, you can compare the effects of market volatilities on IA FINANCIAL and KENEDIX OFFICE 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 IA FINANCIAL with a short position of KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA FINANCIAL and KENEDIX OFFICE.
Diversification Opportunities for IA FINANCIAL and KENEDIX OFFICE
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 1OD and KENEDIX is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding IA FINANCIAL P and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV and IA FINANCIAL 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 IA FINANCIAL P are associated (or correlated) with KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of IA FINANCIAL i.e., IA FINANCIAL and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between IA FINANCIAL and KENEDIX OFFICE
Assuming the 90 days horizon IA FINANCIAL is expected to generate 1.65 times less return on investment than KENEDIX OFFICE. But when comparing it to its historical volatility, IA FINANCIAL P is 1.7 times less risky than KENEDIX OFFICE. It trades about 0.09 of its potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 86,500 in KENEDIX OFFICE INV on October 20, 2024 and sell it today you would earn a total of 2,500 from holding KENEDIX OFFICE INV or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
IA FINANCIAL P vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| IA FINANCIAL P |
| KENEDIX OFFICE INV |
IA FINANCIAL and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA FINANCIAL and KENEDIX OFFICE
The main advantage of trading using opposite IA FINANCIAL and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA FINANCIAL position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| IA FINANCIAL vs. Allianz SE | IA FINANCIAL vs. ALLIANZ SE UNSPADR | IA FINANCIAL vs. AXA SA | IA FINANCIAL vs. ASSGENERALI ADR 12EO |
| KENEDIX OFFICE vs. Air Lease | KENEDIX OFFICE vs. WILLIS LEASE FIN | KENEDIX OFFICE vs. Kingdee International Software | KENEDIX OFFICE vs. AM EAGLE OUTFITTERS |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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