Correlation Between KENEDIX OFFICE and Focus Home
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and Focus Home 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 KENEDIX OFFICE and Focus Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and Focus Home Interactive, you can compare the effects of market volatilities on KENEDIX OFFICE and Focus Home 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 KENEDIX OFFICE with a short position of Focus Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and Focus Home.
Diversification Opportunities for KENEDIX OFFICE and Focus Home
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KENEDIX and Focus is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and Focus Home Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Home Interactive and KENEDIX OFFICE 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 KENEDIX OFFICE INV are associated (or correlated) with Focus Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Home Interactive has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and Focus Home go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and Focus Home
Assuming the 90 days horizon KENEDIX OFFICE is expected to generate 2.75 times less return on investment than Focus Home. But when comparing it to its historical volatility, KENEDIX OFFICE INV is 1.94 times less risky than Focus Home. It trades about 0.08 of its potential returns per unit of risk. Focus Home Interactive is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,135 in Focus Home Interactive on October 10, 2024 and sell it today you would earn a total of 160.00 from holding Focus Home Interactive or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. Focus Home Interactive
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| Focus Home Interactive |
KENEDIX OFFICE and Focus Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and Focus Home
The main advantage of trading using opposite KENEDIX OFFICE and Focus Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, Focus Home 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 Focus Home will offset losses from the drop in Focus Home's long position.| KENEDIX OFFICE vs. PULSION Medical Systems | KENEDIX OFFICE vs. Merit Medical Systems | KENEDIX OFFICE vs. BOSTON BEER A | KENEDIX OFFICE vs. Genertec Universal Medical |
| Focus Home vs. Goosehead Insurance | Focus Home vs. QBE Insurance Group | Focus Home vs. Japan Post Insurance | Focus Home vs. Singapore Reinsurance |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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