Correlation Between KENEDIX OFFICE and American States
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and American States 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 American States 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 American States Water, you can compare the effects of market volatilities on KENEDIX OFFICE and American States 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 American States. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and American States.
Diversification Opportunities for KENEDIX OFFICE and American States
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KENEDIX and American is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and American States Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American States Water 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 American States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American States Water has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and American States go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and American States
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to under-perform the American States. But the stock apears to be less risky and, when comparing its historical volatility, KENEDIX OFFICE INV is 1.07 times less risky than American States. The stock trades about -0.03 of its potential returns per unit of risk. The American States Water is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,592 in American States Water on August 29, 2024 and sell it today you would earn a total of 433.00 from holding American States Water or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. American States Water
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| American States Water |
KENEDIX OFFICE and American States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and American States
The main advantage of trading using opposite KENEDIX OFFICE and American States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, American States 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 American States will offset losses from the drop in American States' long position.| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
| American States vs. TITAN MACHINERY | American States vs. DAIRY FARM INTL | American States vs. Chongqing Machinery Electric | American States vs. Titan Machinery |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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