Correlation Between Kenon Holdings and First Horizon
Can any of the company-specific risk be diversified away by investing in both Kenon Holdings and First Horizon 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 Kenon Holdings and First Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenon Holdings and First Horizon, you can compare the effects of market volatilities on Kenon Holdings and First Horizon 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 Kenon Holdings with a short position of First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and First Horizon.
Diversification Opportunities for Kenon Holdings and First Horizon
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kenon and First is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon and Kenon Holdings 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 Kenon Holdings are associated (or correlated) with First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and First Horizon go up and down completely randomly.
Pair Corralation between Kenon Holdings and First Horizon
Considering the 90-day investment horizon Kenon Holdings is expected to generate 2.26 times more return on investment than First Horizon. However, Kenon Holdings is 2.26 times more volatile than First Horizon. It trades about 0.05 of its potential returns per unit of risk. First Horizon is currently generating about 0.07 per unit of risk. If you would invest 2,181 in Kenon Holdings on September 2, 2024 and sell it today you would earn a total of 804.00 from holding Kenon Holdings or generate 36.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenon Holdings vs. First Horizon
Performance |
| Timeline |
| Kenon Holdings |
| First Horizon |
Kenon Holdings and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenon Holdings and First Horizon
The main advantage of trading using opposite Kenon Holdings and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
| First Horizon vs. Tower One Wireless | First Horizon vs. Femasys | First Horizon vs. Nyxoah | First Horizon vs. Chester Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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