Correlation Between Kaman and Leonardo SpA
Can any of the company-specific risk be diversified away by investing in both Kaman and Leonardo SpA 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 Kaman and Leonardo SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaman and Leonardo SpA ADR, you can compare the effects of market volatilities on Kaman and Leonardo SpA 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 Kaman with a short position of Leonardo SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaman and Leonardo SpA.
Diversification Opportunities for Kaman and Leonardo SpA
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaman and Leonardo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kaman and Leonardo SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leonardo SpA ADR and Kaman 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 Kaman are associated (or correlated) with Leonardo SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leonardo SpA ADR has no effect on the direction of Kaman i.e., Kaman and Leonardo SpA go up and down completely randomly.
Pair Corralation between Kaman and Leonardo SpA
If you would invest 1,199 in Leonardo SpA ADR on August 31, 2024 and sell it today you would earn a total of 116.00 from holding Leonardo SpA ADR or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Kaman vs. Leonardo SpA ADR
Performance |
| Timeline |
| Kaman |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Leonardo SpA ADR |
Kaman and Leonardo SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaman and Leonardo SpA
The main advantage of trading using opposite Kaman and Leonardo SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaman position performs unexpectedly, Leonardo SpA 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 Leonardo SpA will offset losses from the drop in Leonardo SpA's long position.| Kaman vs. Ducommun Incorporated | Kaman vs. Innovative Solutions and | Kaman vs. National Presto Industries | Kaman vs. Astronics |
| Leonardo SpA vs. Leonardo Spa | Leonardo SpA vs. Thales SA ADR | Leonardo SpA vs. Safran SA | Leonardo SpA vs. Rheinmetall AG ADR |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |