Correlation Between VARIOUS EATERIES and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES and KAUFMAN ET 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 VARIOUS EATERIES and KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and KAUFMAN ET BROAD, you can compare the effects of market volatilities on VARIOUS EATERIES and KAUFMAN ET 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 VARIOUS EATERIES with a short position of KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and KAUFMAN ET.
Diversification Opportunities for VARIOUS EATERIES and KAUFMAN ET
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VARIOUS and KAUFMAN is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD and VARIOUS EATERIES 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 VARIOUS EATERIES LS are associated (or correlated) with KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and KAUFMAN ET go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and KAUFMAN ET
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the KAUFMAN ET. In addition to that, VARIOUS EATERIES is 1.21 times more volatile than KAUFMAN ET BROAD. It trades about -0.03 of its total potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about 0.04 per unit of volatility. If you would invest 2,360 in KAUFMAN ET BROAD on September 1, 2024 and sell it today you would earn a total of 740.00 from holding KAUFMAN ET BROAD or generate 31.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| VARIOUS EATERIES |
| KAUFMAN ET BROAD |
VARIOUS EATERIES and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and KAUFMAN ET
The main advantage of trading using opposite VARIOUS EATERIES and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| VARIOUS EATERIES vs. USWE SPORTS AB | VARIOUS EATERIES vs. Fukuyama Transporting Co | VARIOUS EATERIES vs. Transport International Holdings | VARIOUS EATERIES vs. NetSol Technologies |
| KAUFMAN ET vs. SIVERS SEMICONDUCTORS AB | KAUFMAN ET vs. Darden Restaurants | KAUFMAN ET vs. Reliance Steel Aluminum | KAUFMAN ET vs. Q2M Managementberatung AG |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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