Correlation Between KC Metalsheet and Masterkool International
Can any of the company-specific risk be diversified away by investing in both KC Metalsheet and Masterkool International 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 KC Metalsheet and Masterkool International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KC Metalsheet Public and Masterkool International Public, you can compare the effects of market volatilities on KC Metalsheet and Masterkool International 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 KC Metalsheet with a short position of Masterkool International. Check out your portfolio center. Please also check ongoing floating volatility patterns of KC Metalsheet and Masterkool International.
Diversification Opportunities for KC Metalsheet and Masterkool International
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KCM and Masterkool is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding KC Metalsheet Public and Masterkool International Publi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterkool International and KC Metalsheet 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 KC Metalsheet Public are associated (or correlated) with Masterkool International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterkool International has no effect on the direction of KC Metalsheet i.e., KC Metalsheet and Masterkool International go up and down completely randomly.
Pair Corralation between KC Metalsheet and Masterkool International
Assuming the 90 days trading horizon KC Metalsheet is expected to generate 1.01 times less return on investment than Masterkool International. In addition to that, KC Metalsheet is 1.0 times more volatile than Masterkool International Public. It trades about 0.06 of its total potential returns per unit of risk. Masterkool International Public is currently generating about 0.06 per unit of volatility. If you would invest 36.00 in Masterkool International Public on August 25, 2024 and sell it today you would lose (1.00) from holding Masterkool International Public or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KC Metalsheet Public vs. Masterkool International Publi
Performance |
| Timeline |
| KC Metalsheet Public |
| Masterkool International |
KC Metalsheet and Masterkool International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KC Metalsheet and Masterkool International
The main advantage of trading using opposite KC Metalsheet and Masterkool International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KC Metalsheet position performs unexpectedly, Masterkool International 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 Masterkool International will offset losses from the drop in Masterkool International's long position.| KC Metalsheet vs. Masterkool International Public | KC Metalsheet vs. Kingsmen CMTI Public | KC Metalsheet vs. Hydrotek Public | KC Metalsheet vs. Home Pottery Public |
| Masterkool International vs. Kingsmen CMTI Public | Masterkool International vs. Filter Vision Public | Masterkool International vs. Jay Mart Public | Masterkool International vs. KC Metalsheet Public |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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