Correlation Between 4 Less and Knorr-Bremse Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both 4 Less and Knorr-Bremse Aktiengesellscha 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 4 Less and Knorr-Bremse Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 4 Less Group and Knorr Bremse Aktiengesellschaft, you can compare the effects of market volatilities on 4 Less and Knorr-Bremse Aktiengesellscha 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 4 Less with a short position of Knorr-Bremse Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of 4 Less and Knorr-Bremse Aktiengesellscha.
Diversification Opportunities for 4 Less and Knorr-Bremse Aktiengesellscha
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FLES and Knorr-Bremse is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding 4 Less Group and Knorr Bremse Aktiengesellschaf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knorr-Bremse Aktiengesellscha and 4 Less 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 4 Less Group are associated (or correlated) with Knorr-Bremse Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knorr-Bremse Aktiengesellscha has no effect on the direction of 4 Less i.e., 4 Less and Knorr-Bremse Aktiengesellscha go up and down completely randomly.
Pair Corralation between 4 Less and Knorr-Bremse Aktiengesellscha
Given the investment horizon of 90 days 4 Less Group is expected to generate 12.88 times more return on investment than Knorr-Bremse Aktiengesellscha. However, 4 Less is 12.88 times more volatile than Knorr Bremse Aktiengesellschaft. It trades about 0.01 of its potential returns per unit of risk. Knorr Bremse Aktiengesellschaft is currently generating about 0.07 per unit of risk. If you would invest 1.60 in 4 Less Group on September 4, 2024 and sell it today you would lose (1.58) from holding 4 Less Group or give up 98.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
4 Less Group vs. Knorr Bremse Aktiengesellschaf
Performance |
| Timeline |
| 4 Less Group |
| Knorr-Bremse Aktiengesellscha |
4 Less and Knorr-Bremse Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 4 Less and Knorr-Bremse Aktiengesellscha
The main advantage of trading using opposite 4 Less and Knorr-Bremse Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 4 Less position performs unexpectedly, Knorr-Bremse Aktiengesellscha 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 Knorr-Bremse Aktiengesellscha will offset losses from the drop in Knorr-Bremse Aktiengesellscha's long position.The idea behind 4 Less Group and Knorr Bremse Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |