Correlation Between K-Bro Linen and SPAR
Can any of the company-specific risk be diversified away by investing in both K-Bro Linen and SPAR 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 Linen and SPAR 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 SPAR Group, you can compare the effects of market volatilities on K-Bro Linen and SPAR 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 Linen with a short position of SPAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of K-Bro Linen and SPAR.
Diversification Opportunities for K-Bro Linen and SPAR
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between K-Bro and SPAR is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group and K-Bro Linen 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 SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of K-Bro Linen i.e., K-Bro Linen and SPAR go up and down completely randomly.
Pair Corralation between K-Bro Linen and SPAR
If you would invest 2,625 in K Bro Linen on August 30, 2024 and sell it today you would earn a total of 0.00 from holding K Bro Linen or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
K Bro Linen vs. SPAR Group
Performance |
| Timeline |
| K Bro Linen |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SPAR Group |
K-Bro Linen and SPAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K-Bro Linen and SPAR
The main advantage of trading using opposite K-Bro Linen and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K-Bro Linen position performs unexpectedly, SPAR 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 SPAR will offset losses from the drop in SPAR's long position.| K-Bro Linen vs. Wilhelmina | K-Bro Linen vs. Brambles Ltd ADR | K-Bro Linen vs. Rentokil Initial PLC | K-Bro Linen vs. Team Inc |
| SPAR vs. Mitie Group Plc | SPAR vs. Dexterra Group | SPAR vs. Wildpack Beverage | SPAR vs. Intertek Group Plc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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