Correlation Between Fras Le and Kepler Weber
Can any of the company-specific risk be diversified away by investing in both Fras Le and Kepler Weber 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 Fras Le and Kepler Weber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and Kepler Weber SA, you can compare the effects of market volatilities on Fras Le and Kepler Weber 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 Fras Le with a short position of Kepler Weber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and Kepler Weber.
Diversification Opportunities for Fras Le and Kepler Weber
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fras and Kepler is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and Kepler Weber SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kepler Weber SA and Fras Le 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 Fras le SA are associated (or correlated) with Kepler Weber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kepler Weber SA has no effect on the direction of Fras Le i.e., Fras Le and Kepler Weber go up and down completely randomly.
Pair Corralation between Fras Le and Kepler Weber
Assuming the 90 days trading horizon Fras le SA is expected to under-perform the Kepler Weber. But the stock apears to be less risky and, when comparing its historical volatility, Fras le SA is 1.61 times less risky than Kepler Weber. The stock trades about -0.26 of its potential returns per unit of risk. The Kepler Weber SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 914.00 in Kepler Weber SA on August 25, 2024 and sell it today you would earn a total of 106.00 from holding Kepler Weber SA or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fras le SA vs. Kepler Weber SA
Performance |
| Timeline |
| Fras le SA |
| Kepler Weber SA |
Fras Le and Kepler Weber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and Kepler Weber
The main advantage of trading using opposite Fras Le and Kepler Weber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le position performs unexpectedly, Kepler Weber 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 Kepler Weber will offset losses from the drop in Kepler Weber's long position.| Fras Le vs. Baidu Inc | Fras Le vs. Deutsche Bank Aktiengesellschaft | Fras Le vs. HSBC Holdings plc | Fras Le vs. The Bank of |
| Kepler Weber vs. METISA Metalrgica Timboense | Kepler Weber vs. Lupatech SA | Kepler Weber vs. Recrusul SA | Kepler Weber vs. Fras le SA |
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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