Correlation Between Kko International and Financiere Moncey
Can any of the company-specific risk be diversified away by investing in both Kko International and Financiere Moncey 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 Kko International and Financiere Moncey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kko International SA and Financiere Moncey SA, you can compare the effects of market volatilities on Kko International and Financiere Moncey 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 Kko International with a short position of Financiere Moncey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kko International and Financiere Moncey.
Diversification Opportunities for Kko International and Financiere Moncey
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kko and Financiere is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kko International SA and Financiere Moncey SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financiere Moncey and Kko International 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 Kko International SA are associated (or correlated) with Financiere Moncey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financiere Moncey has no effect on the direction of Kko International i.e., Kko International and Financiere Moncey go up and down completely randomly.
Pair Corralation between Kko International and Financiere Moncey
Assuming the 90 days trading horizon Kko International SA is expected to generate 2.96 times more return on investment than Financiere Moncey. However, Kko International is 2.96 times more volatile than Financiere Moncey SA. It trades about 0.45 of its potential returns per unit of risk. Financiere Moncey SA is currently generating about 0.34 per unit of risk. If you would invest 11.00 in Kko International SA on September 28, 2024 and sell it today you would earn a total of 7.00 from holding Kko International SA or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kko International SA vs. Financiere Moncey SA
Performance |
| Timeline |
| Kko International |
| Financiere Moncey |
Kko International and Financiere Moncey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kko International and Financiere Moncey
The main advantage of trading using opposite Kko International and Financiere Moncey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kko International position performs unexpectedly, Financiere Moncey 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 Financiere Moncey will offset losses from the drop in Financiere Moncey's long position.| Kko International vs. Agrogeneration | Kko International vs. Safe Orthopaedics SA | Kko International vs. DBT SA | Kko International vs. Acheter Louer |
| Financiere Moncey vs. LVMH Mot Hennessy | Financiere Moncey vs. Manitou BF SA | Financiere Moncey vs. Memscap Regpt | Financiere Moncey vs. Maat Pharma SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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