Correlation Between H2O Retailing and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and KENEDIX OFFICE 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 H2O Retailing and KENEDIX OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and KENEDIX OFFICE INV, you can compare the effects of market volatilities on H2O Retailing and KENEDIX OFFICE 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 H2O Retailing with a short position of KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and KENEDIX OFFICE.
Diversification Opportunities for H2O Retailing and KENEDIX OFFICE
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between H2O and KENEDIX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV and H2O Retailing 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 H2O Retailing are associated (or correlated) with KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of H2O Retailing i.e., H2O Retailing and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between H2O Retailing and KENEDIX OFFICE
Assuming the 90 days horizon H2O Retailing is expected to generate 2.15 times more return on investment than KENEDIX OFFICE. However, H2O Retailing is 2.15 times more volatile than KENEDIX OFFICE INV. It trades about 0.07 of its potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about -0.01 per unit of risk. If you would invest 645.00 in H2O Retailing on November 5, 2024 and sell it today you would earn a total of 785.00 from holding H2O Retailing or generate 121.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| H2O Retailing |
| KENEDIX OFFICE INV |
H2O Retailing and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and KENEDIX OFFICE
The main advantage of trading using opposite H2O Retailing and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| H2O Retailing vs. PT Steel Pipe | H2O Retailing vs. TOMBADOR IRON LTD | H2O Retailing vs. DENTSPLY SIRONA | H2O Retailing vs. MOUNT GIBSON IRON |
| KENEDIX OFFICE vs. American Eagle Outfitters | KENEDIX OFFICE vs. Kingdee International Software | KENEDIX OFFICE vs. CHINA TONTINE WINES | KENEDIX OFFICE vs. Unity Software |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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