Correlation Between KINGBOARD CHEMICAL and CHIBA BANK
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and CHIBA BANK 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 CHIBA BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and CHIBA BANK, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and CHIBA BANK 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 CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and CHIBA BANK.
Diversification Opportunities for KINGBOARD CHEMICAL and CHIBA BANK
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KINGBOARD and CHIBA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA BANK 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 CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and CHIBA BANK go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and CHIBA BANK
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.95 times more return on investment than CHIBA BANK. However, KINGBOARD CHEMICAL is 1.95 times more volatile than CHIBA BANK. It trades about 0.13 of its potential returns per unit of risk. CHIBA BANK is currently generating about 0.13 per unit of risk. If you would invest 196.00 in KINGBOARD CHEMICAL on November 6, 2024 and sell it today you would earn a total of 50.00 from holding KINGBOARD CHEMICAL or generate 25.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.31% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. CHIBA BANK
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| CHIBA BANK |
KINGBOARD CHEMICAL and CHIBA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and CHIBA BANK
The main advantage of trading using opposite KINGBOARD CHEMICAL and CHIBA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, CHIBA BANK 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 CHIBA BANK will offset losses from the drop in CHIBA BANK's long position.| KINGBOARD CHEMICAL vs. ALTAIR RES INC | KINGBOARD CHEMICAL vs. WESANA HEALTH HOLD | KINGBOARD CHEMICAL vs. PURETECH HEALTH PLC | KINGBOARD CHEMICAL vs. CARDINAL HEALTH |
| CHIBA BANK vs. De Grey Mining | CHIBA BANK vs. Eurasia Mining Plc | CHIBA BANK vs. NTG Nordic Transport | CHIBA BANK vs. TITANIUM TRANSPORTGROUP |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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