Correlation Between Broadwind and Kaufman Broad
Can any of the company-specific risk be diversified away by investing in both Broadwind and Kaufman Broad 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 Broadwind and Kaufman Broad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadwind and Kaufman Broad SA, you can compare the effects of market volatilities on Broadwind and Kaufman Broad 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 Broadwind with a short position of Kaufman Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadwind and Kaufman Broad.
Diversification Opportunities for Broadwind and Kaufman Broad
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Broadwind and Kaufman is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Broadwind and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad SA and Broadwind 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 Broadwind are associated (or correlated) with Kaufman Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of Broadwind i.e., Broadwind and Kaufman Broad go up and down completely randomly.
Pair Corralation between Broadwind and Kaufman Broad
Assuming the 90 days trading horizon Broadwind is expected to generate 2.94 times more return on investment than Kaufman Broad. However, Broadwind is 2.94 times more volatile than Kaufman Broad SA. It trades about 0.02 of its potential returns per unit of risk. Kaufman Broad SA is currently generating about 0.04 per unit of risk. If you would invest 175.00 in Broadwind on September 4, 2024 and sell it today you would lose (2.00) from holding Broadwind or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadwind vs. Kaufman Broad SA
Performance |
| Timeline |
| Broadwind |
| Kaufman Broad SA |
Broadwind and Kaufman Broad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadwind and Kaufman Broad
The main advantage of trading using opposite Broadwind and Kaufman Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadwind position performs unexpectedly, Kaufman Broad 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 Broad will offset losses from the drop in Kaufman Broad's long position.| Broadwind vs. MINCO SILVER | Broadwind vs. Ming Le Sports | Broadwind vs. GRIFFIN MINING LTD | Broadwind vs. CI GAMES SA |
| Kaufman Broad vs. Sekisui Chemical Co | Kaufman Broad vs. BARRATT DEVEL UNSPADR2 | Kaufman Broad vs. Superior Plus Corp | Kaufman Broad vs. NMI Holdings |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |