Correlation Between K Bro and Information Services
Can any of the company-specific risk be diversified away by investing in both K Bro and Information Services 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 Information Services 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 Information Services, you can compare the effects of market volatilities on K Bro and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Bro and Information Services.
Diversification Opportunities for K Bro and Information Services
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBL and Information is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of K Bro i.e., K Bro and Information Services go up and down completely randomly.
Pair Corralation between K Bro and Information Services
Assuming the 90 days trading horizon K Bro Linen is expected to generate 0.89 times more return on investment than Information Services. However, K Bro Linen is 1.12 times less risky than Information Services. It trades about 0.05 of its potential returns per unit of risk. Information Services is currently generating about 0.04 per unit of risk. If you would invest 2,746 in K Bro Linen on August 26, 2024 and sell it today you would earn a total of 950.00 from holding K Bro Linen or generate 34.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
K Bro Linen vs. Information Services
Performance |
| Timeline |
| K Bro Linen |
| Information Services |
K Bro and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K Bro and Information Services
The main advantage of trading using opposite K Bro and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Bro position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' 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 |
| Information Services vs. Pollard Banknote Limited | Information Services vs. K Bro Linen | Information Services vs. Calian Technologies | Information Services vs. Evertz 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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