Correlation Between Kensington Managed and Kensington Managed
Can any of the company-specific risk be diversified away by investing in both Kensington Managed and Kensington Managed 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 Kensington Managed and Kensington Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kensington Managed Income and Kensington Managed Income, you can compare the effects of market volatilities on Kensington Managed and Kensington Managed 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 Kensington Managed with a short position of Kensington Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kensington Managed and Kensington Managed.
Diversification Opportunities for Kensington Managed and Kensington Managed
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Kensington and Kensington is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Kensington Managed Income and Kensington Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Managed Income and Kensington Managed 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 Kensington Managed Income are associated (or correlated) with Kensington Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Managed Income has no effect on the direction of Kensington Managed i.e., Kensington Managed and Kensington Managed go up and down completely randomly.
Pair Corralation between Kensington Managed and Kensington Managed
Assuming the 90 days horizon Kensington Managed Income is expected to generate 1.16 times more return on investment than Kensington Managed. However, Kensington Managed is 1.16 times more volatile than Kensington Managed Income. It trades about 0.12 of its potential returns per unit of risk. Kensington Managed Income is currently generating about 0.1 per unit of risk. If you would invest 982.00 in Kensington Managed Income on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Kensington Managed Income or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kensington Managed Income vs. Kensington Managed Income
Performance |
| Timeline |
| Kensington Managed Income |
| Kensington Managed Income |
Kensington Managed and Kensington Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kensington Managed and Kensington Managed
The main advantage of trading using opposite Kensington Managed and Kensington Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kensington Managed position performs unexpectedly, Kensington Managed 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 Kensington Managed will offset losses from the drop in Kensington Managed's long position.| Kensington Managed vs. Pace High Yield | Kensington Managed vs. Siit High Yield | Kensington Managed vs. Buffalo High Yield | Kensington Managed vs. Virtus High Yield |
| Kensington Managed vs. Angel Oak Financial | Kensington Managed vs. Rmb Mendon Financial | Kensington Managed vs. Blackrock Financial Institutions | Kensington Managed vs. Fidelity Advisor Financial |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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