Correlation Between KINGBOARD CHEMICAL and GRUPO CARSO-A1
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and GRUPO CARSO-A1 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 KINGBOARD CHEMICAL and GRUPO CARSO-A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and GRUPO CARSO A1, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and GRUPO CARSO-A1 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 KINGBOARD CHEMICAL with a short position of GRUPO CARSO-A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and GRUPO CARSO-A1.
Diversification Opportunities for KINGBOARD CHEMICAL and GRUPO CARSO-A1
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between KINGBOARD and GRUPO is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and GRUPO CARSO A1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRUPO CARSO A1 and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL are associated (or correlated) with GRUPO CARSO-A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRUPO CARSO A1 has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and GRUPO CARSO-A1 go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and GRUPO CARSO-A1
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 0.92 times more return on investment than GRUPO CARSO-A1. However, KINGBOARD CHEMICAL is 1.08 times less risky than GRUPO CARSO-A1. It trades about 0.22 of its potential returns per unit of risk. GRUPO CARSO A1 is currently generating about 0.14 per unit of risk. If you would invest 226.00 in KINGBOARD CHEMICAL on November 7, 2024 and sell it today you would earn a total of 20.00 from holding KINGBOARD CHEMICAL or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. GRUPO CARSO A1
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| GRUPO CARSO A1 |
KINGBOARD CHEMICAL and GRUPO CARSO-A1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and GRUPO CARSO-A1
The main advantage of trading using opposite KINGBOARD CHEMICAL and GRUPO CARSO-A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, GRUPO CARSO-A1 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 GRUPO CARSO-A1 will offset losses from the drop in GRUPO CARSO-A1's long position.| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc |
| GRUPO CARSO-A1 vs. MAVEN WIRELESS SWEDEN | GRUPO CARSO-A1 vs. T MOBILE US | GRUPO CARSO-A1 vs. Sims Metal Management | GRUPO CARSO-A1 vs. Siemens Healthineers AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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