Correlation Between KBR and Api Group
Can any of the company-specific risk be diversified away by investing in both KBR and Api Group 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 KBR and Api Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBR Inc and Api Group Corp, you can compare the effects of market volatilities on KBR and Api Group 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 KBR with a short position of Api Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBR and Api Group.
Diversification Opportunities for KBR and Api Group
Pay attention - limited upside
The 3 months correlation between KBR and Api is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KBR Inc and Api Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Api Group Corp and KBR 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 KBR Inc are associated (or correlated) with Api Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Api Group Corp has no effect on the direction of KBR i.e., KBR and Api Group go up and down completely randomly.
Pair Corralation between KBR and Api Group
If you would invest 0.00 in Api Group Corp on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Api Group Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBR Inc vs. Api Group Corp
Performance |
| Timeline |
| KBR Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Api Group Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KBR and Api Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBR and Api Group
The main advantage of trading using opposite KBR and Api Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBR position performs unexpectedly, Api Group 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 Api Group will offset losses from the drop in Api Group's long position.The idea behind KBR Inc and Api Group Corp 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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