Correlation Between K Bro and Currency Exchange
Can any of the company-specific risk be diversified away by investing in both K Bro and Currency Exchange 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 K Bro and Currency Exchange into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K Bro Linen and Currency Exchange International, you can compare the effects of market volatilities on K Bro and Currency Exchange 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 K Bro with a short position of Currency Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Bro and Currency Exchange.
Diversification Opportunities for K Bro and Currency Exchange
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBL and Currency is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and Currency Exchange Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Currency Exchange and K Bro 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 K Bro Linen are associated (or correlated) with Currency Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Currency Exchange has no effect on the direction of K Bro i.e., K Bro and Currency Exchange go up and down completely randomly.
Pair Corralation between K Bro and Currency Exchange
Assuming the 90 days trading horizon K Bro Linen is expected to generate 1.39 times more return on investment than Currency Exchange. However, K Bro is 1.39 times more volatile than Currency Exchange International. It trades about 0.04 of its potential returns per unit of risk. Currency Exchange International is currently generating about -0.02 per unit of risk. If you would invest 3,254 in K Bro Linen on November 3, 2024 and sell it today you would earn a total of 438.00 from holding K Bro Linen or generate 13.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K Bro Linen vs. Currency Exchange Internationa
Performance |
| Timeline |
| K Bro Linen |
| Currency Exchange |
K Bro and Currency Exchange Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K Bro and Currency Exchange
The main advantage of trading using opposite K Bro and Currency Exchange positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Bro position performs unexpectedly, Currency Exchange 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 Currency Exchange will offset losses from the drop in Currency Exchange's long position.| K Bro vs. Richards Packaging Income | K Bro vs. Ag Growth International | K Bro vs. Information Services | K Bro vs. Pollard Banknote Limited |
| Currency Exchange vs. Caldwell Partners International | Currency Exchange vs. Firan Technology Group | Currency Exchange vs. K Bro Linen | Currency Exchange vs. Exco Technologies Limited |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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