Correlation Between Kronos Worldwide and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both Kronos Worldwide and STORE ELECTRONIC 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 Kronos Worldwide and STORE ELECTRONIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Worldwide and STORE ELECTRONIC, you can compare the effects of market volatilities on Kronos Worldwide and STORE ELECTRONIC 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 Kronos Worldwide with a short position of STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Worldwide and STORE ELECTRONIC.
Diversification Opportunities for Kronos Worldwide and STORE ELECTRONIC
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kronos and STORE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Worldwide and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC and Kronos Worldwide 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 Kronos Worldwide are associated (or correlated) with STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of Kronos Worldwide i.e., Kronos Worldwide and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between Kronos Worldwide and STORE ELECTRONIC
Assuming the 90 days horizon Kronos Worldwide is expected to generate 1.11 times more return on investment than STORE ELECTRONIC. However, Kronos Worldwide is 1.11 times more volatile than STORE ELECTRONIC. It trades about 0.04 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about 0.01 per unit of risk. If you would invest 1,034 in Kronos Worldwide on September 2, 2024 and sell it today you would earn a total of 50.00 from holding Kronos Worldwide or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kronos Worldwide vs. STORE ELECTRONIC
Performance |
| Timeline |
| Kronos Worldwide |
| STORE ELECTRONIC |
Kronos Worldwide and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Worldwide and STORE ELECTRONIC
The main advantage of trading using opposite Kronos Worldwide and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Worldwide position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| Kronos Worldwide vs. Pembina Pipeline Corp | Kronos Worldwide vs. Perseus Mining Limited | Kronos Worldwide vs. Western Copper and | Kronos Worldwide vs. Goodyear Tire Rubber |
| STORE ELECTRONIC vs. SIVERS SEMICONDUCTORS AB | STORE ELECTRONIC vs. Darden Restaurants | STORE ELECTRONIC vs. Reliance Steel Aluminum | STORE ELECTRONIC vs. Q2M Managementberatung AG |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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