Correlation Between Continental Beverage and Kasten
Can any of the company-specific risk be diversified away by investing in both Continental Beverage and Kasten 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 Continental Beverage and Kasten into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Beverage Brands and Kasten Inc, you can compare the effects of market volatilities on Continental Beverage and Kasten 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 Continental Beverage with a short position of Kasten. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Beverage and Kasten.
Diversification Opportunities for Continental Beverage and Kasten
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Continental and Kasten is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Continental Beverage Brands and Kasten Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kasten Inc and Continental Beverage 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 Continental Beverage Brands are associated (or correlated) with Kasten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kasten Inc has no effect on the direction of Continental Beverage i.e., Continental Beverage and Kasten go up and down completely randomly.
Pair Corralation between Continental Beverage and Kasten
Given the investment horizon of 90 days Continental Beverage Brands is expected to generate 11.81 times more return on investment than Kasten. However, Continental Beverage is 11.81 times more volatile than Kasten Inc. It trades about 0.19 of its potential returns per unit of risk. Kasten Inc is currently generating about 0.03 per unit of risk. If you would invest 18.00 in Continental Beverage Brands on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Continental Beverage Brands or generate 288.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Continental Beverage Brands vs. Kasten Inc
Performance |
| Timeline |
| Continental Beverage |
| Kasten Inc |
Continental Beverage and Kasten Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Beverage and Kasten
The main advantage of trading using opposite Continental Beverage and Kasten positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Beverage position performs unexpectedly, Kasten 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 Kasten will offset losses from the drop in Kasten's long position.| Continental Beverage vs. Green Planet Bio | Continental Beverage vs. Azure Holding Group | Continental Beverage vs. Four Leaf Acquisition | Continental Beverage vs. Opus Magnum Ameris |
| Kasten vs. Interups | Kasten vs. Church Crawford | Kasten vs. Active Health Foods | Kasten vs. Gold Ent 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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