Correlation Between Kewaunee Scientific and Leggett Platt
Can any of the company-specific risk be diversified away by investing in both Kewaunee Scientific and Leggett Platt 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 Kewaunee Scientific and Leggett Platt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kewaunee Scientific and Leggett Platt Incorporated, you can compare the effects of market volatilities on Kewaunee Scientific and Leggett Platt 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 Kewaunee Scientific with a short position of Leggett Platt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewaunee Scientific and Leggett Platt.
Diversification Opportunities for Kewaunee Scientific and Leggett Platt
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kewaunee and Leggett is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kewaunee Scientific and Leggett Platt Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggett Platt and Kewaunee Scientific 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 Kewaunee Scientific are associated (or correlated) with Leggett Platt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggett Platt has no effect on the direction of Kewaunee Scientific i.e., Kewaunee Scientific and Leggett Platt go up and down completely randomly.
Pair Corralation between Kewaunee Scientific and Leggett Platt
Given the investment horizon of 90 days Kewaunee Scientific is expected to generate 2.28 times more return on investment than Leggett Platt. However, Kewaunee Scientific is 2.28 times more volatile than Leggett Platt Incorporated. It trades about 0.16 of its potential returns per unit of risk. Leggett Platt Incorporated is currently generating about 0.23 per unit of risk. If you would invest 5,493 in Kewaunee Scientific on October 20, 2024 and sell it today you would earn a total of 707.00 from holding Kewaunee Scientific or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kewaunee Scientific vs. Leggett Platt Incorporated
Performance |
| Timeline |
| Kewaunee Scientific |
| Leggett Platt |
Kewaunee Scientific and Leggett Platt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kewaunee Scientific and Leggett Platt
The main advantage of trading using opposite Kewaunee Scientific and Leggett Platt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewaunee Scientific position performs unexpectedly, Leggett Platt 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 Leggett Platt will offset losses from the drop in Leggett Platt's long position.| Kewaunee Scientific vs. Hamilton Beach Brands | Kewaunee Scientific vs. Mohawk Industries | Kewaunee Scientific vs. Whirlpool | Kewaunee Scientific vs. iRobot |
| Leggett Platt vs. Mohawk Industries | Leggett Platt vs. Tempur Sealy International | Leggett Platt vs. Ethan Allen Interiors | Leggett Platt vs. The Lovesac |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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