Correlation Between Embecta Corp and KIN
Can any of the company-specific risk be diversified away by investing in both Embecta Corp and KIN 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 Embecta Corp and KIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embecta Corp and KIN, you can compare the effects of market volatilities on Embecta Corp and KIN 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 Embecta Corp with a short position of KIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embecta Corp and KIN.
Diversification Opportunities for Embecta Corp and KIN
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Embecta and KIN is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp and KIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIN and Embecta Corp 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 Embecta Corp are associated (or correlated) with KIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIN has no effect on the direction of Embecta Corp i.e., Embecta Corp and KIN go up and down completely randomly.
Pair Corralation between Embecta Corp and KIN
Given the investment horizon of 90 days Embecta Corp is expected to generate 1.08 times more return on investment than KIN. However, Embecta Corp is 1.08 times more volatile than KIN. It trades about 0.27 of its potential returns per unit of risk. KIN is currently generating about 0.09 per unit of risk. If you would invest 1,454 in Embecta Corp on September 3, 2024 and sell it today you would earn a total of 629.00 from holding Embecta Corp or generate 43.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Embecta Corp vs. KIN
Performance |
| Timeline |
| Embecta Corp |
| KIN |
Embecta Corp and KIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embecta Corp and KIN
The main advantage of trading using opposite Embecta Corp and KIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embecta Corp position performs unexpectedly, KIN 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 KIN will offset losses from the drop in KIN's long position.| Embecta Corp vs. Baxter International | Embecta Corp vs. West Pharmaceutical Services | Embecta Corp vs. ResMed Inc | Embecta Corp vs. The Cooper Companies, |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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