Correlation Between APERAM REG and KENNAMETAL INC
Can any of the company-specific risk be diversified away by investing in both APERAM REG 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 APERAM REG and KENNAMETAL INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APERAM REG and KENNAMETAL INC, you can compare the effects of market volatilities on APERAM REG 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 APERAM REG with a short position of KENNAMETAL INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of APERAM REG and KENNAMETAL INC.
Diversification Opportunities for APERAM REG and KENNAMETAL INC
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between APERAM and KENNAMETAL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding APERAM REG and KENNAMETAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENNAMETAL INC and APERAM REG 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 APERAM REG 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 APERAM REG i.e., APERAM REG and KENNAMETAL INC go up and down completely randomly.
Pair Corralation between APERAM REG and KENNAMETAL INC
Assuming the 90 days trading horizon APERAM REG is expected to generate 0.84 times more return on investment than KENNAMETAL INC. However, APERAM REG is 1.19 times less risky than KENNAMETAL INC. It trades about 0.13 of its potential returns per unit of risk. KENNAMETAL INC is currently generating about -0.15 per unit of risk. If you would invest 2,686 in APERAM REG on September 12, 2024 and sell it today you would earn a total of 98.00 from holding APERAM REG or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
APERAM REG vs. KENNAMETAL INC
Performance |
| Timeline |
| APERAM REG |
| KENNAMETAL INC |
APERAM REG and KENNAMETAL INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APERAM REG and KENNAMETAL INC
The main advantage of trading using opposite APERAM REG and KENNAMETAL INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APERAM REG 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.| APERAM REG vs. KINGBOARD CHEMICAL | APERAM REG vs. COLUMBIA SPORTSWEAR | APERAM REG vs. Playtech plc | APERAM REG vs. TRAVEL LEISURE DL 01 |
| KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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