Correlation Between Columbus McKinnon and Kubota
Can any of the company-specific risk be diversified away by investing in both Columbus McKinnon and Kubota 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 Columbus McKinnon and Kubota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbus McKinnon and Kubota, you can compare the effects of market volatilities on Columbus McKinnon and Kubota 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 Columbus McKinnon with a short position of Kubota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbus McKinnon and Kubota.
Diversification Opportunities for Columbus McKinnon and Kubota
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Columbus and Kubota is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Columbus McKinnon and Kubota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kubota and Columbus McKinnon 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 Columbus McKinnon are associated (or correlated) with Kubota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kubota has no effect on the direction of Columbus McKinnon i.e., Columbus McKinnon and Kubota go up and down completely randomly.
Pair Corralation between Columbus McKinnon and Kubota
Given the investment horizon of 90 days Columbus McKinnon is expected to generate 1.12 times more return on investment than Kubota. However, Columbus McKinnon is 1.12 times more volatile than Kubota. It trades about 0.23 of its potential returns per unit of risk. Kubota is currently generating about -0.15 per unit of risk. If you would invest 3,270 in Columbus McKinnon on August 24, 2024 and sell it today you would earn a total of 444.00 from holding Columbus McKinnon or generate 13.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbus McKinnon vs. Kubota
Performance |
| Timeline |
| Columbus McKinnon |
| Kubota |
Columbus McKinnon and Kubota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbus McKinnon and Kubota
The main advantage of trading using opposite Columbus McKinnon and Kubota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbus McKinnon position performs unexpectedly, Kubota 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 Kubota will offset losses from the drop in Kubota's long position.| Columbus McKinnon vs. Lindsay | Columbus McKinnon vs. Astec Industries | Columbus McKinnon vs. Shyft Group | Columbus McKinnon vs. AGCO Corporation |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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