Correlation Between QUEEN S and KRAKATAU STEEL
Can any of the company-specific risk be diversified away by investing in both QUEEN S and KRAKATAU STEEL 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 QUEEN S and KRAKATAU STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QUEEN S ROAD and KRAKATAU STEEL B , you can compare the effects of market volatilities on QUEEN S and KRAKATAU STEEL 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 QUEEN S with a short position of KRAKATAU STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and KRAKATAU STEEL.
Diversification Opportunities for QUEEN S and KRAKATAU STEEL
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between QUEEN and KRAKATAU is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and KRAKATAU STEEL B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAKATAU STEEL B and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with KRAKATAU STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAKATAU STEEL B has no effect on the direction of QUEEN S i.e., QUEEN S and KRAKATAU STEEL go up and down completely randomly.
Pair Corralation between QUEEN S and KRAKATAU STEEL
Assuming the 90 days horizon QUEEN S is expected to generate 3.35 times less return on investment than KRAKATAU STEEL. But when comparing it to its historical volatility, QUEEN S ROAD is 1.79 times less risky than KRAKATAU STEEL. It trades about 0.02 of its potential returns per unit of risk. KRAKATAU STEEL B is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2.55 in KRAKATAU STEEL B on October 14, 2024 and sell it today you would lose (1.70) from holding KRAKATAU STEEL B or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QUEEN S ROAD vs. KRAKATAU STEEL B
Performance |
| Timeline |
| QUEEN S ROAD |
| KRAKATAU STEEL B |
QUEEN S and KRAKATAU STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QUEEN S and KRAKATAU STEEL
The main advantage of trading using opposite QUEEN S and KRAKATAU STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S position performs unexpectedly, KRAKATAU STEEL 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 KRAKATAU STEEL will offset losses from the drop in KRAKATAU STEEL's long position.| QUEEN S vs. Electronic Arts | QUEEN S vs. STMicroelectronics NV | QUEEN S vs. CARSALESCOM | QUEEN S vs. PACIFIC ONLINE |
| KRAKATAU STEEL vs. Air Transport Services | KRAKATAU STEEL vs. QUEEN S ROAD | KRAKATAU STEEL vs. alstria office REIT AG | KRAKATAU STEEL vs. Focus Home Interactive |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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