Correlation Between IRobot and Kewaunee Scientific
Can any of the company-specific risk be diversified away by investing in both IRobot and Kewaunee Scientific 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 IRobot and Kewaunee Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iRobot and Kewaunee Scientific, you can compare the effects of market volatilities on IRobot and Kewaunee Scientific 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 IRobot with a short position of Kewaunee Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of IRobot and Kewaunee Scientific.
Diversification Opportunities for IRobot and Kewaunee Scientific
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IRobot and Kewaunee is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iRobot and Kewaunee Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewaunee Scientific and IRobot 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 iRobot are associated (or correlated) with Kewaunee Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewaunee Scientific has no effect on the direction of IRobot i.e., IRobot and Kewaunee Scientific go up and down completely randomly.
Pair Corralation between IRobot and Kewaunee Scientific
Given the investment horizon of 90 days iRobot is expected to under-perform the Kewaunee Scientific. In addition to that, IRobot is 2.07 times more volatile than Kewaunee Scientific. It trades about -0.01 of its total potential returns per unit of risk. Kewaunee Scientific is currently generating about 0.29 per unit of volatility. If you would invest 3,230 in Kewaunee Scientific on August 28, 2024 and sell it today you would earn a total of 1,024 from holding Kewaunee Scientific or generate 31.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
iRobot vs. Kewaunee Scientific
Performance |
| Timeline |
| iRobot |
| Kewaunee Scientific |
IRobot and Kewaunee Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IRobot and Kewaunee Scientific
The main advantage of trading using opposite IRobot and Kewaunee Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IRobot position performs unexpectedly, Kewaunee Scientific 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 Kewaunee Scientific will offset losses from the drop in Kewaunee Scientific's long position.| IRobot vs. Tempur Sealy International | IRobot vs. La Z Boy Incorporated | IRobot vs. Purple Innovation | IRobot vs. MasterBrand |
| Kewaunee Scientific vs. Hamilton Beach Brands | Kewaunee Scientific vs. Mohawk Industries | Kewaunee Scientific vs. Whirlpool | Kewaunee Scientific vs. iRobot |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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