Correlation Between Buhler Industries and Kinaxis
Can any of the company-specific risk be diversified away by investing in both Buhler Industries and Kinaxis 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 Buhler Industries and Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buhler Industries and Kinaxis, you can compare the effects of market volatilities on Buhler Industries and Kinaxis 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 Buhler Industries with a short position of Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buhler Industries and Kinaxis.
Diversification Opportunities for Buhler Industries and Kinaxis
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Buhler and Kinaxis is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Buhler Industries and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Buhler Industries 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 Buhler Industries are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Buhler Industries i.e., Buhler Industries and Kinaxis go up and down completely randomly.
Pair Corralation between Buhler Industries and Kinaxis
Assuming the 90 days trading horizon Buhler Industries is expected to generate 0.99 times more return on investment than Kinaxis. However, Buhler Industries is 1.01 times less risky than Kinaxis. It trades about 0.09 of its potential returns per unit of risk. Kinaxis is currently generating about 0.07 per unit of risk. If you would invest 223.00 in Buhler Industries on September 3, 2024 and sell it today you would earn a total of 72.00 from holding Buhler Industries or generate 32.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buhler Industries vs. Kinaxis
Performance |
| Timeline |
| Buhler Industries |
| Kinaxis |
Buhler Industries and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buhler Industries and Kinaxis
The main advantage of trading using opposite Buhler Industries and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buhler Industries position performs unexpectedly, Kinaxis 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 Kinaxis will offset losses from the drop in Kinaxis' long position.| Buhler Industries vs. Clarke Inc | Buhler Industries vs. Accord Financial Corp | Buhler Industries vs. ADF Group | Buhler Industries vs. Algoma Central |
| Kinaxis vs. Open Text Corp | Kinaxis vs. Enghouse Systems | Kinaxis vs. Docebo Inc | Kinaxis vs. Descartes Systems Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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