Correlation Between Bellring Brands and KH Group
Can any of the company-specific risk be diversified away by investing in both Bellring Brands and KH Group 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 Bellring Brands and KH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bellring Brands LLC and KH Group Oyj, you can compare the effects of market volatilities on Bellring Brands and KH Group 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 Bellring Brands with a short position of KH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bellring Brands and KH Group.
Diversification Opportunities for Bellring Brands and KH Group
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bellring and KHG is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bellring Brands LLC and KH Group Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KH Group Oyj and Bellring Brands 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 Bellring Brands LLC are associated (or correlated) with KH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KH Group Oyj has no effect on the direction of Bellring Brands i.e., Bellring Brands and KH Group go up and down completely randomly.
Pair Corralation between Bellring Brands and KH Group
Given the investment horizon of 90 days Bellring Brands is expected to generate 50.82 times less return on investment than KH Group. But when comparing it to its historical volatility, Bellring Brands LLC is 154.14 times less risky than KH Group. It trades about 0.63 of its potential returns per unit of risk. KH Group Oyj is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 58.00 in KH Group Oyj on September 1, 2024 and sell it today you would earn a total of 10,029 from holding KH Group Oyj or generate 17291.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Bellring Brands LLC vs. KH Group Oyj
Performance |
| Timeline |
| Bellring Brands LLC |
| KH Group Oyj |
Bellring Brands and KH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bellring Brands and KH Group
The main advantage of trading using opposite Bellring Brands and KH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bellring Brands position performs unexpectedly, KH Group 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 KH Group will offset losses from the drop in KH Group's long position.| Bellring Brands vs. Treehouse Foods | Bellring Brands vs. Pilgrims Pride Corp | Bellring Brands vs. Ingredion Incorporated | Bellring Brands vs. JM Smucker |
| KH Group vs. Sotkamo Silver AB | KH Group vs. Reka Industrial Oyj | KH Group vs. SSH Communications Security | KH Group vs. Detection Technology OY |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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