Correlation Between KINGBOARD CHEMICAL and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and Alfa Financial 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 Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Alfa Financial Software, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Alfa Financial.
Diversification Opportunities for KINGBOARD CHEMICAL and Alfa Financial
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KINGBOARD and Alfa is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Alfa Financial go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Alfa Financial
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.97 times more return on investment than Alfa Financial. However, KINGBOARD CHEMICAL is 1.97 times more volatile than Alfa Financial Software. It trades about 0.07 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.11 per unit of risk. If you would invest 140.00 in KINGBOARD CHEMICAL on September 2, 2024 and sell it today you would earn a total of 84.00 from holding KINGBOARD CHEMICAL or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Alfa Financial Software
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Alfa Financial Software |
KINGBOARD CHEMICAL and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Alfa Financial
The main advantage of trading using opposite KINGBOARD CHEMICAL and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| KINGBOARD CHEMICAL vs. G8 EDUCATION | KINGBOARD CHEMICAL vs. Tower Semiconductor | KINGBOARD CHEMICAL vs. DeVry Education Group | KINGBOARD CHEMICAL vs. Nordic Semiconductor ASA |
| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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