Correlation Between John Bean and Kone Oyj
Can any of the company-specific risk be diversified away by investing in both John Bean and Kone Oyj 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 John Bean and Kone Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Bean Technologies and Kone Oyj ADR, you can compare the effects of market volatilities on John Bean and Kone Oyj 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 John Bean with a short position of Kone Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Bean and Kone Oyj.
Diversification Opportunities for John Bean and Kone Oyj
Excellent diversification
The 3 months correlation between John and Kone is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding John Bean Technologies and Kone Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kone Oyj ADR and John Bean 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 John Bean Technologies are associated (or correlated) with Kone Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kone Oyj ADR has no effect on the direction of John Bean i.e., John Bean and Kone Oyj go up and down completely randomly.
Pair Corralation between John Bean and Kone Oyj
Considering the 90-day investment horizon John Bean Technologies is expected to generate 1.57 times more return on investment than Kone Oyj. However, John Bean is 1.57 times more volatile than Kone Oyj ADR. It trades about 0.03 of its potential returns per unit of risk. Kone Oyj ADR is currently generating about 0.04 per unit of risk. If you would invest 10,647 in John Bean Technologies on September 12, 2024 and sell it today you would earn a total of 1,940 from holding John Bean Technologies or generate 18.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
John Bean Technologies vs. Kone Oyj ADR
Performance |
| Timeline |
| John Bean Technologies |
| Kone Oyj ADR |
John Bean and Kone Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Bean and Kone Oyj
The main advantage of trading using opposite John Bean and Kone Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Bean position performs unexpectedly, Kone Oyj 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 Kone Oyj will offset losses from the drop in Kone Oyj's long position.| John Bean vs. Pentair PLC | John Bean vs. Parker Hannifin | John Bean vs. Emerson Electric | John Bean vs. Smith AO |
| Kone Oyj vs. Generac Holdings | Kone Oyj vs. Atlas Copco ADR | Kone Oyj vs. John Bean Technologies | Kone Oyj vs. Franklin Electric Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |