Correlation Between Kewaunee Scientific and Patrick Industries
Can any of the company-specific risk be diversified away by investing in both Kewaunee Scientific and Patrick Industries 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 Patrick Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kewaunee Scientific and Patrick Industries, you can compare the effects of market volatilities on Kewaunee Scientific and Patrick Industries 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 Patrick Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewaunee Scientific and Patrick Industries.
Diversification Opportunities for Kewaunee Scientific and Patrick Industries
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kewaunee and Patrick is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kewaunee Scientific and Patrick Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patrick Industries 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 Patrick Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patrick Industries has no effect on the direction of Kewaunee Scientific i.e., Kewaunee Scientific and Patrick Industries go up and down completely randomly.
Pair Corralation between Kewaunee Scientific and Patrick Industries
Given the investment horizon of 90 days Kewaunee Scientific is expected to generate 1.26 times more return on investment than Patrick Industries. However, Kewaunee Scientific is 1.26 times more volatile than Patrick Industries. It trades about 0.28 of its potential returns per unit of risk. Patrick Industries is currently generating about 0.0 per unit of risk. If you would invest 3,237 in Kewaunee Scientific on August 30, 2024 and sell it today you would earn a total of 1,032 from holding Kewaunee Scientific or generate 31.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kewaunee Scientific vs. Patrick Industries
Performance |
| Timeline |
| Kewaunee Scientific |
| Patrick Industries |
Kewaunee Scientific and Patrick Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kewaunee Scientific and Patrick Industries
The main advantage of trading using opposite Kewaunee Scientific and Patrick Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewaunee Scientific position performs unexpectedly, Patrick Industries 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 Patrick Industries will offset losses from the drop in Patrick Industries' long position.| Kewaunee Scientific vs. Hamilton Beach Brands | Kewaunee Scientific vs. Mohawk Industries | Kewaunee Scientific vs. Whirlpool | Kewaunee Scientific vs. iRobot |
| Patrick Industries vs. Bassett Furniture Industries | Patrick Industries vs. Ethan Allen Interiors | Patrick Industries vs. Natuzzi SpA | Patrick Industries vs. Flexsteel Industries |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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