Correlation Between KINGBOARD CHEMICAL and Bilfinger
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and Bilfinger 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 Bilfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Bilfinger SE, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and Bilfinger 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 Bilfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Bilfinger.
Diversification Opportunities for KINGBOARD CHEMICAL and Bilfinger
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KINGBOARD and Bilfinger is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Bilfinger SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilfinger SE 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 Bilfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilfinger SE has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Bilfinger go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Bilfinger
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 2.09 times more return on investment than Bilfinger. However, KINGBOARD CHEMICAL is 2.09 times more volatile than Bilfinger SE. It trades about 0.05 of its potential returns per unit of risk. Bilfinger SE is currently generating about 0.08 per unit of risk. If you would invest 136.00 in KINGBOARD CHEMICAL on September 14, 2024 and sell it today you would earn a total of 102.00 from holding KINGBOARD CHEMICAL or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Bilfinger SE
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Bilfinger SE |
KINGBOARD CHEMICAL and Bilfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Bilfinger
The main advantage of trading using opposite KINGBOARD CHEMICAL and Bilfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, Bilfinger 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 Bilfinger will offset losses from the drop in Bilfinger's 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 |
| Bilfinger vs. Calibre Mining Corp | Bilfinger vs. Nissan Chemical Corp | Bilfinger vs. KINGBOARD CHEMICAL | Bilfinger vs. Sanyo Chemical Industries |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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