Correlation Between KENEDIX OFFICE and Flight Centre
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and Flight Centre 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 Flight Centre 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 Flight Centre Travel, you can compare the effects of market volatilities on KENEDIX OFFICE and Flight Centre 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 Flight Centre. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and Flight Centre.
Diversification Opportunities for KENEDIX OFFICE and Flight Centre
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KENEDIX and Flight is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and Flight Centre Travel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flight Centre Travel 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 Flight Centre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flight Centre Travel has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and Flight Centre go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and Flight Centre
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.6 times more return on investment than Flight Centre. However, KENEDIX OFFICE INV is 1.66 times less risky than Flight Centre. It trades about -0.03 of its potential returns per unit of risk. Flight Centre Travel is currently generating about -0.02 per unit of risk. If you would invest 105,000 in KENEDIX OFFICE INV on September 12, 2024 and sell it today you would lose (16,000) from holding KENEDIX OFFICE INV or give up 15.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. Flight Centre Travel
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| Flight Centre Travel |
KENEDIX OFFICE and Flight Centre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and Flight Centre
The main advantage of trading using opposite KENEDIX OFFICE and Flight Centre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE position performs unexpectedly, Flight Centre 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 Flight Centre will offset losses from the drop in Flight Centre's long position.| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
| Flight Centre vs. KENEDIX OFFICE INV | Flight Centre vs. British American Tobacco | Flight Centre vs. CITY OFFICE REIT | Flight Centre vs. MTI WIRELESS EDGE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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