Correlation Between Andrew Peller and K Bro
Can any of the company-specific risk be diversified away by investing in both Andrew Peller and K Bro 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 Andrew Peller and K Bro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andrew Peller Limited and K Bro Linen, you can compare the effects of market volatilities on Andrew Peller and K Bro 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 Andrew Peller with a short position of K Bro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andrew Peller and K Bro.
Diversification Opportunities for Andrew Peller and K Bro
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Andrew and KBL is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Andrew Peller Limited and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen and Andrew Peller 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 Andrew Peller Limited are associated (or correlated) with K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of Andrew Peller i.e., Andrew Peller and K Bro go up and down completely randomly.
Pair Corralation between Andrew Peller and K Bro
Assuming the 90 days trading horizon Andrew Peller is expected to generate 41.9 times less return on investment than K Bro. But when comparing it to its historical volatility, Andrew Peller Limited is 1.05 times less risky than K Bro. It trades about 0.02 of its potential returns per unit of risk. K Bro Linen is currently generating about 0.68 of returns per unit of risk over similar time horizon. If you would invest 3,376 in K Bro Linen on September 4, 2024 and sell it today you would earn a total of 499.00 from holding K Bro Linen or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Andrew Peller Limited vs. K Bro Linen
Performance |
| Timeline |
| Andrew Peller Limited |
| K Bro Linen |
Andrew Peller and K Bro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andrew Peller and K Bro
The main advantage of trading using opposite Andrew Peller and K Bro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andrew Peller position performs unexpectedly, K Bro 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 K Bro will offset losses from the drop in K Bro's long position.| Andrew Peller vs. Corby Spirit and | Andrew Peller vs. Stella Jones | Andrew Peller vs. Transcontinental | Andrew Peller vs. CCL Industries |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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