Correlation Between KINGBOARD CHEMICAL and APERAM REG
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and APERAM REG 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 APERAM REG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and APERAM REG, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and APERAM REG 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 APERAM REG. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and APERAM REG.
Diversification Opportunities for KINGBOARD CHEMICAL and APERAM REG
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KINGBOARD and APERAM is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and APERAM REG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APERAM REG 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 APERAM REG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APERAM REG has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and APERAM REG go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and APERAM REG
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 2.13 times more return on investment than APERAM REG. However, KINGBOARD CHEMICAL is 2.13 times more volatile than APERAM REG. It trades about 0.05 of its potential returns per unit of risk. APERAM REG is currently generating about 0.02 per unit of risk. If you would invest 134.00 in KINGBOARD CHEMICAL on September 12, 2024 and sell it today you would earn a total of 102.00 from holding KINGBOARD CHEMICAL or generate 76.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. APERAM REG
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| APERAM REG |
KINGBOARD CHEMICAL and APERAM REG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and APERAM REG
The main advantage of trading using opposite KINGBOARD CHEMICAL and APERAM REG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, APERAM REG 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 APERAM REG will offset losses from the drop in APERAM REG's long position.| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc |
| APERAM REG vs. KINGBOARD CHEMICAL | APERAM REG vs. COLUMBIA SPORTSWEAR | APERAM REG vs. Playtech plc | APERAM REG vs. TRAVEL LEISURE DL 01 |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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