Correlation Between BII Railway and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both BII Railway and KENEDIX OFFICE 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 BII Railway and KENEDIX OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BII Railway Transportation and KENEDIX OFFICE INV, you can compare the effects of market volatilities on BII Railway and KENEDIX OFFICE 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 BII Railway with a short position of KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BII Railway and KENEDIX OFFICE.
Diversification Opportunities for BII Railway and KENEDIX OFFICE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BII and KENEDIX is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BII Railway Transportation and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV and BII Railway 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 BII Railway Transportation are associated (or correlated) with KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of BII Railway i.e., BII Railway and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between BII Railway and KENEDIX OFFICE
Assuming the 90 days horizon BII Railway Transportation is expected to generate 2.8 times more return on investment than KENEDIX OFFICE. However, BII Railway is 2.8 times more volatile than KENEDIX OFFICE INV. It trades about 0.01 of its potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about -0.03 per unit of risk. If you would invest 3.15 in BII Railway Transportation on August 26, 2024 and sell it today you would lose (0.55) from holding BII Railway Transportation or give up 17.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BII Railway Transportation vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| BII Railway Transpor |
| KENEDIX OFFICE INV |
BII Railway and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BII Railway and KENEDIX OFFICE
The main advantage of trading using opposite BII Railway and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BII Railway position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| BII Railway vs. Accenture plc | BII Railway vs. Cognizant Technology Solutions | BII Railway vs. Superior Plus Corp | BII Railway vs. NMI Holdings |
| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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