Correlation Between Integral and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Integral and Kontoor Brands 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 Integral and Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Ad Science and Kontoor Brands, you can compare the effects of market volatilities on Integral and Kontoor Brands 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 Integral with a short position of Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and Kontoor Brands.
Diversification Opportunities for Integral and Kontoor Brands
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Integral and Kontoor is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands and Integral 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 Integral Ad Science are associated (or correlated) with Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Integral i.e., Integral and Kontoor Brands go up and down completely randomly.
Pair Corralation between Integral and Kontoor Brands
Considering the 90-day investment horizon Integral Ad Science is expected to generate 0.7 times more return on investment than Kontoor Brands. However, Integral Ad Science is 1.44 times less risky than Kontoor Brands. It trades about 0.28 of its potential returns per unit of risk. Kontoor Brands is currently generating about 0.03 per unit of risk. If you would invest 972.00 in Integral Ad Science on November 8, 2024 and sell it today you would earn a total of 95.00 from holding Integral Ad Science or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integral Ad Science vs. Kontoor Brands
Performance |
| Timeline |
| Integral Ad Science |
| Kontoor Brands |
Integral and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and Kontoor Brands
The main advantage of trading using opposite Integral and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.The idea behind Integral Ad Science and Kontoor Brands 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.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Global Correlations Find global opportunities by holding instruments from different markets |