Correlation Between Cadence Design and KINDER
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By analyzing existing cross correlation between Cadence Design Systems and KINDER MORGAN ENERGY, you can compare the effects of market volatilities on Cadence Design and KINDER 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 Cadence Design with a short position of KINDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Design and KINDER.
Diversification Opportunities for Cadence Design and KINDER
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cadence and KINDER is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Design Systems and KINDER MORGAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINDER MORGAN ENERGY and Cadence Design 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 Cadence Design Systems are associated (or correlated) with KINDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINDER MORGAN ENERGY has no effect on the direction of Cadence Design i.e., Cadence Design and KINDER go up and down completely randomly.
Pair Corralation between Cadence Design and KINDER
Given the investment horizon of 90 days Cadence Design Systems is expected to generate 3.53 times more return on investment than KINDER. However, Cadence Design is 3.53 times more volatile than KINDER MORGAN ENERGY. It trades about 0.13 of its potential returns per unit of risk. KINDER MORGAN ENERGY is currently generating about -0.12 per unit of risk. If you would invest 25,628 in Cadence Design Systems on September 3, 2024 and sell it today you would earn a total of 5,053 from holding Cadence Design Systems or generate 19.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.38% |
| Values | Daily Returns |
Cadence Design Systems vs. KINDER MORGAN ENERGY
Performance |
| Timeline |
| Cadence Design Systems |
| KINDER MORGAN ENERGY |
Cadence Design and KINDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadence Design and KINDER
The main advantage of trading using opposite Cadence Design and KINDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Design position performs unexpectedly, KINDER 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 KINDER will offset losses from the drop in KINDER's long position.| Cadence Design vs. Workday | Cadence Design vs. Salesforce | Cadence Design vs. Intuit Inc | Cadence Design vs. Snowflake |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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