Correlation Between KINGBOARD CHEMICAL and Consolidated Communications
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and Consolidated Communications 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 Consolidated Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Consolidated Communications Holdings, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and Consolidated Communications 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 Consolidated Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Consolidated Communications.
Diversification Opportunities for KINGBOARD CHEMICAL and Consolidated Communications
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KINGBOARD and Consolidated is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Consolidated Communications go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Consolidated Communications
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 3.21 times more return on investment than Consolidated Communications. However, KINGBOARD CHEMICAL is 3.21 times more volatile than Consolidated Communications Holdings. It trades about 0.05 of its potential returns per unit of risk. Consolidated Communications Holdings is currently generating about 0.07 per unit of risk. If you would invest 146.00 in KINGBOARD CHEMICAL on September 14, 2024 and sell it today you would earn a total of 52.00 from holding KINGBOARD CHEMICAL or generate 35.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Consolidated Communications Ho
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Consolidated Communications |
KINGBOARD CHEMICAL and Consolidated Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Consolidated Communications
The main advantage of trading using opposite KINGBOARD CHEMICAL and Consolidated Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, Consolidated Communications 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 Consolidated Communications will offset losses from the drop in Consolidated Communications' long position.| KINGBOARD CHEMICAL vs. ALIOR BANK | KINGBOARD CHEMICAL vs. DISTRICT METALS | KINGBOARD CHEMICAL vs. ADRIATIC METALS LS 013355 | KINGBOARD CHEMICAL vs. PT Bank Maybank |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |