Correlation Between KAUFMAN ET and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on KAUFMAN ET and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and TRADEGATE.
Diversification Opportunities for KAUFMAN ET and TRADEGATE
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAUFMAN and TRADEGATE is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of KAUFMAN ET i.e., KAUFMAN ET and TRADEGATE go up and down completely randomly.
Pair Corralation between KAUFMAN ET and TRADEGATE
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to under-perform the TRADEGATE. In addition to that, KAUFMAN ET is 1.23 times more volatile than TRADEGATE. It trades about -0.3 of its total potential returns per unit of risk. TRADEGATE is currently generating about -0.16 per unit of volatility. If you would invest 8,800 in TRADEGATE on August 31, 2024 and sell it today you would lose (350.00) from holding TRADEGATE or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. TRADEGATE
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| TRADEGATE |
KAUFMAN ET and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and TRADEGATE
The main advantage of trading using opposite KAUFMAN ET and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| KAUFMAN ET vs. Direct Line Insurance | KAUFMAN ET vs. Zijin Mining Group | KAUFMAN ET vs. Lion One Metals | KAUFMAN ET vs. Japan Post Insurance |
| TRADEGATE vs. KAUFMAN ET BROAD | TRADEGATE vs. Gaztransport Technigaz SA | TRADEGATE vs. Fukuyama Transporting Co | TRADEGATE vs. PRECISION DRILLING P |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |