Correlation Between KINGBOARD CHEMICAL and BankUnited
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and BankUnited 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 BankUnited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and BankUnited, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and BankUnited 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 BankUnited. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and BankUnited.
Diversification Opportunities for KINGBOARD CHEMICAL and BankUnited
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KINGBOARD and BankUnited is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and BankUnited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankUnited 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 BankUnited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankUnited has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and BankUnited go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and BankUnited
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 14.44 times less return on investment than BankUnited. In addition to that, KINGBOARD CHEMICAL is 1.12 times more volatile than BankUnited. It trades about 0.01 of its total potential returns per unit of risk. BankUnited is currently generating about 0.15 per unit of volatility. If you would invest 2,532 in BankUnited on September 13, 2024 and sell it today you would earn a total of 1,388 from holding BankUnited or generate 54.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. BankUnited
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| BankUnited |
KINGBOARD CHEMICAL and BankUnited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and BankUnited
The main advantage of trading using opposite KINGBOARD CHEMICAL and BankUnited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, BankUnited 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 BankUnited will offset losses from the drop in BankUnited's long position.| KINGBOARD CHEMICAL vs. CENTURIA OFFICE REIT | KINGBOARD CHEMICAL vs. Cogent Communications Holdings | KINGBOARD CHEMICAL vs. INVITATION HOMES DL | KINGBOARD CHEMICAL vs. Aedas Homes SA |
| BankUnited vs. Sekisui Chemical Co | BankUnited vs. Soken Chemical Engineering | BankUnited vs. Eastman Chemical | BankUnited vs. Bausch Health Companies |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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