Correlation Between Keg Royalties and K Bro
Can any of the company-specific risk be diversified away by investing in both Keg Royalties and K Bro 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 Keg Royalties and K Bro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Keg Royalties and K Bro Linen, you can compare the effects of market volatilities on Keg Royalties and K Bro 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 Keg Royalties with a short position of K Bro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keg Royalties and K Bro.
Diversification Opportunities for Keg Royalties and K Bro
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Keg and KBL is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Keg Royalties and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen and Keg Royalties 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 The Keg Royalties are associated (or correlated) with K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of Keg Royalties i.e., Keg Royalties and K Bro go up and down completely randomly.
Pair Corralation between Keg Royalties and K Bro
Assuming the 90 days trading horizon The Keg Royalties is expected to under-perform the K Bro. But the stock apears to be less risky and, when comparing its historical volatility, The Keg Royalties is 1.98 times less risky than K Bro. The stock trades about -0.27 of its potential returns per unit of risk. The K Bro Linen is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 3,308 in K Bro Linen on August 25, 2024 and sell it today you would earn a total of 388.00 from holding K Bro Linen or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Keg Royalties vs. K Bro Linen
Performance |
| Timeline |
| Keg Royalties |
| K Bro Linen |
Keg Royalties and K Bro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keg Royalties and K Bro
The main advantage of trading using opposite Keg Royalties and K Bro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keg Royalties position performs unexpectedly, K Bro 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 K Bro will offset losses from the drop in K Bro's long position.| Keg Royalties vs. Boston Pizza Royalties | Keg Royalties vs. SIR Royalty Income | Keg Royalties vs. Pizza Pizza Royalty | Keg Royalties vs. Chemtrade Logistics Income |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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