Correlation Between KC Metalsheet and RB FOOD
Can any of the company-specific risk be diversified away by investing in both KC Metalsheet and RB FOOD 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 RB FOOD 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 RB FOOD SUPPLY, you can compare the effects of market volatilities on KC Metalsheet and RB FOOD 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 RB FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of KC Metalsheet and RB FOOD.
Diversification Opportunities for KC Metalsheet and RB FOOD
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KCM and RBF-R is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding KC Metalsheet Public and RB FOOD SUPPLY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB FOOD SUPPLY 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 RB FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB FOOD SUPPLY has no effect on the direction of KC Metalsheet i.e., KC Metalsheet and RB FOOD go up and down completely randomly.
Pair Corralation between KC Metalsheet and RB FOOD
Assuming the 90 days trading horizon KC Metalsheet Public is expected to generate 0.21 times more return on investment than RB FOOD. However, KC Metalsheet Public is 4.72 times less risky than RB FOOD. It trades about -0.25 of its potential returns per unit of risk. RB FOOD SUPPLY is currently generating about -0.14 per unit of risk. If you would invest 34.00 in KC Metalsheet Public on September 5, 2024 and sell it today you would lose (4.00) from holding KC Metalsheet Public or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KC Metalsheet Public vs. RB FOOD SUPPLY
Performance |
| Timeline |
| KC Metalsheet Public |
| RB FOOD SUPPLY |
KC Metalsheet and RB FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KC Metalsheet and RB FOOD
The main advantage of trading using opposite KC Metalsheet and RB FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KC Metalsheet position performs unexpectedly, RB FOOD 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 RB FOOD will offset losses from the drop in RB FOOD's long position.| KC Metalsheet vs. Chewathai Public | KC Metalsheet vs. AIRA Factoring Public | KC Metalsheet vs. Cho Thavee Public | KC Metalsheet vs. G Capital Public |
| RB FOOD vs. Kingsmen CMTI Public | RB FOOD vs. Hydrotek Public | RB FOOD vs. Karmarts Public | RB FOOD 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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