Correlation Between ZANAGA IRON and KENNAMETAL INC
Can any of the company-specific risk be diversified away by investing in both ZANAGA IRON and KENNAMETAL INC 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 ZANAGA IRON and KENNAMETAL INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZANAGA IRON ORE and KENNAMETAL INC, you can compare the effects of market volatilities on ZANAGA IRON and KENNAMETAL INC 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 ZANAGA IRON with a short position of KENNAMETAL INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZANAGA IRON and KENNAMETAL INC.
Diversification Opportunities for ZANAGA IRON and KENNAMETAL INC
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ZANAGA and KENNAMETAL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding ZANAGA IRON ORE and KENNAMETAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENNAMETAL INC and ZANAGA IRON 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 ZANAGA IRON ORE are associated (or correlated) with KENNAMETAL INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENNAMETAL INC has no effect on the direction of ZANAGA IRON i.e., ZANAGA IRON and KENNAMETAL INC go up and down completely randomly.
Pair Corralation between ZANAGA IRON and KENNAMETAL INC
Assuming the 90 days trading horizon ZANAGA IRON ORE is expected to under-perform the KENNAMETAL INC. In addition to that, ZANAGA IRON is 1.02 times more volatile than KENNAMETAL INC. It trades about -0.08 of its total potential returns per unit of risk. KENNAMETAL INC is currently generating about 0.23 per unit of volatility. If you would invest 2,283 in KENNAMETAL INC on August 28, 2024 and sell it today you would earn a total of 477.00 from holding KENNAMETAL INC or generate 20.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZANAGA IRON ORE vs. KENNAMETAL INC
Performance |
| Timeline |
| ZANAGA IRON ORE |
| KENNAMETAL INC |
ZANAGA IRON and KENNAMETAL INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZANAGA IRON and KENNAMETAL INC
The main advantage of trading using opposite ZANAGA IRON and KENNAMETAL INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZANAGA IRON position performs unexpectedly, KENNAMETAL INC 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 KENNAMETAL INC will offset losses from the drop in KENNAMETAL INC's long position.| ZANAGA IRON vs. AGF Management Limited | ZANAGA IRON vs. CPU SOFTWAREHOUSE | ZANAGA IRON vs. SHELF DRILLING LTD | ZANAGA IRON vs. AWILCO DRILLING PLC |
| KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Microsoft | KENNAMETAL INC vs. Microsoft |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |