Correlation Between Leonardo SpA and Kaman
Can any of the company-specific risk be diversified away by investing in both Leonardo SpA and Kaman 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 Leonardo SpA and Kaman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leonardo SpA ADR and Kaman, you can compare the effects of market volatilities on Leonardo SpA and Kaman 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 Leonardo SpA with a short position of Kaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leonardo SpA and Kaman.
Diversification Opportunities for Leonardo SpA and Kaman
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Leonardo and Kaman is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Leonardo SpA ADR and Kaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaman and Leonardo SpA 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 Leonardo SpA ADR are associated (or correlated) with Kaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaman has no effect on the direction of Leonardo SpA i.e., Leonardo SpA and Kaman go up and down completely randomly.
Pair Corralation between Leonardo SpA and Kaman
If you would invest 1,199 in Leonardo SpA ADR on August 31, 2024 and sell it today you would earn a total of 116.00 from holding Leonardo SpA ADR or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Leonardo SpA ADR vs. Kaman
Performance |
| Timeline |
| Leonardo SpA ADR |
| Kaman |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Leonardo SpA and Kaman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leonardo SpA and Kaman
The main advantage of trading using opposite Leonardo SpA and Kaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leonardo SpA position performs unexpectedly, Kaman 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 Kaman will offset losses from the drop in Kaman's long position.| Leonardo SpA vs. Leonardo Spa | Leonardo SpA vs. Thales SA ADR | Leonardo SpA vs. Safran SA | Leonardo SpA vs. Rheinmetall AG ADR |
| Kaman vs. Ducommun Incorporated | Kaman vs. Innovative Solutions and | Kaman vs. National Presto Industries | Kaman vs. Astronics |
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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