Correlation Between Brompton European and Kinaxis
Can any of the company-specific risk be diversified away by investing in both Brompton European 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 Brompton European and Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton European Dividend and Kinaxis, you can compare the effects of market volatilities on Brompton European 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 Brompton European with a short position of Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton European and Kinaxis.
Diversification Opportunities for Brompton European and Kinaxis
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brompton and Kinaxis is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Brompton European Dividend and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Brompton European 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 Brompton European Dividend 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 Brompton European i.e., Brompton European and Kinaxis go up and down completely randomly.
Pair Corralation between Brompton European and Kinaxis
Assuming the 90 days trading horizon Brompton European Dividend is expected to generate 0.45 times more return on investment than Kinaxis. However, Brompton European Dividend is 2.24 times less risky than Kinaxis. It trades about 0.08 of its potential returns per unit of risk. Kinaxis is currently generating about 0.03 per unit of risk. If you would invest 864.00 in Brompton European Dividend on August 25, 2024 and sell it today you would earn a total of 207.00 from holding Brompton European Dividend or generate 23.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton European Dividend vs. Kinaxis
Performance |
| Timeline |
| Brompton European |
| Kinaxis |
Brompton European and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton European and Kinaxis
The main advantage of trading using opposite Brompton European and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton European 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.| Brompton European vs. Brompton Global Dividend | Brompton European vs. Global Healthcare Income | Brompton European vs. Tech Leaders Income | Brompton European vs. Brompton North American |
| Kinaxis vs. Forstrong Global Income | Kinaxis vs. Terreno Resources Corp | Kinaxis vs. iShares Canadian HYBrid | Kinaxis vs. Brompton European Dividend |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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