Correlation Between Avanos Medical and KEPPEL CORP
Can any of the company-specific risk be diversified away by investing in both Avanos Medical and KEPPEL CORP 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 Avanos Medical and KEPPEL CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanos Medical and KEPPEL P , you can compare the effects of market volatilities on Avanos Medical and KEPPEL CORP 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 Avanos Medical with a short position of KEPPEL CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanos Medical and KEPPEL CORP.
Diversification Opportunities for Avanos Medical and KEPPEL CORP
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avanos and KEPPEL is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Avanos Medical and KEPPEL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEPPEL CORP and Avanos Medical 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 Avanos Medical are associated (or correlated) with KEPPEL CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEPPEL CORP has no effect on the direction of Avanos Medical i.e., Avanos Medical and KEPPEL CORP go up and down completely randomly.
Pair Corralation between Avanos Medical and KEPPEL CORP
Assuming the 90 days trading horizon Avanos Medical is expected to generate 2.15 times less return on investment than KEPPEL CORP. In addition to that, Avanos Medical is 2.45 times more volatile than KEPPEL P . It trades about 0.01 of its total potential returns per unit of risk. KEPPEL P is currently generating about 0.04 per unit of volatility. If you would invest 428.00 in KEPPEL P on September 3, 2024 and sell it today you would earn a total of 43.00 from holding KEPPEL P or generate 10.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avanos Medical vs. KEPPEL P
Performance |
| Timeline |
| Avanos Medical |
| KEPPEL CORP |
Avanos Medical and KEPPEL CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanos Medical and KEPPEL CORP
The main advantage of trading using opposite Avanos Medical and KEPPEL CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanos Medical position performs unexpectedly, KEPPEL CORP 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 KEPPEL CORP will offset losses from the drop in KEPPEL CORP's long position.| Avanos Medical vs. Lifeway Foods | Avanos Medical vs. DEVRY EDUCATION GRP | Avanos Medical vs. CAL MAINE FOODS | Avanos Medical vs. Xinhua Winshare Publishing |
| KEPPEL CORP vs. Major Drilling Group | KEPPEL CORP vs. BORR DRILLING NEW | KEPPEL CORP vs. SPORTING | KEPPEL CORP vs. DICKS Sporting Goods |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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