Correlation Between Kadant and Mirion Technologies
Can any of the company-specific risk be diversified away by investing in both Kadant and Mirion Technologies 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 Kadant and Mirion Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kadant Inc and Mirion Technologies, you can compare the effects of market volatilities on Kadant and Mirion Technologies 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 Kadant with a short position of Mirion Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kadant and Mirion Technologies.
Diversification Opportunities for Kadant and Mirion Technologies
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kadant and Mirion is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kadant Inc and Mirion Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirion Technologies and Kadant 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 Kadant Inc are associated (or correlated) with Mirion Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirion Technologies has no effect on the direction of Kadant i.e., Kadant and Mirion Technologies go up and down completely randomly.
Pair Corralation between Kadant and Mirion Technologies
Considering the 90-day investment horizon Kadant is expected to generate 1.26 times less return on investment than Mirion Technologies. But when comparing it to its historical volatility, Kadant Inc is 1.23 times less risky than Mirion Technologies. It trades about 0.1 of its potential returns per unit of risk. Mirion Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 607.00 in Mirion Technologies on August 27, 2024 and sell it today you would earn a total of 1,071 from holding Mirion Technologies or generate 176.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kadant Inc vs. Mirion Technologies
Performance |
| Timeline |
| Kadant Inc |
| Mirion Technologies |
Kadant and Mirion Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kadant and Mirion Technologies
The main advantage of trading using opposite Kadant and Mirion Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kadant position performs unexpectedly, Mirion Technologies 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 Mirion Technologies will offset losses from the drop in Mirion Technologies' long position.The idea behind Kadant Inc and Mirion Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mirion Technologies vs. Enpro Industries | Mirion Technologies vs. Graham | Mirion Technologies vs. CSW Industrials | Mirion Technologies vs. Gorman Rupp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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