Correlation Between CCL Industries and Kinaxis
Can any of the company-specific risk be diversified away by investing in both CCL 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 CCL Industries and Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Kinaxis, you can compare the effects of market volatilities on CCL 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 CCL Industries with a short position of Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Kinaxis.
Diversification Opportunities for CCL Industries and Kinaxis
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CCL and Kinaxis is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and CCL 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 CCL 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 CCL Industries i.e., CCL Industries and Kinaxis go up and down completely randomly.
Pair Corralation between CCL Industries and Kinaxis
Assuming the 90 days trading horizon CCL Industries is expected to generate 0.69 times more return on investment than Kinaxis. However, CCL Industries is 1.45 times less risky than Kinaxis. It trades about 0.1 of its potential returns per unit of risk. Kinaxis is currently generating about 0.03 per unit of risk. If you would invest 5,504 in CCL Industries on August 26, 2024 and sell it today you would earn a total of 2,264 from holding CCL Industries or generate 41.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Kinaxis
Performance |
| Timeline |
| CCL Industries |
| Kinaxis |
CCL Industries and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Kinaxis
The main advantage of trading using opposite CCL Industries and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL 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.| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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