Correlation Between KINGBOARD CHEMICAL and OPEN HOUSE
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL and OPEN HOUSE 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 OPEN HOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and OPEN HOUSE GROUP, you can compare the effects of market volatilities on KINGBOARD CHEMICAL and OPEN HOUSE 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 OPEN HOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and OPEN HOUSE.
Diversification Opportunities for KINGBOARD CHEMICAL and OPEN HOUSE
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KINGBOARD and OPEN is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and OPEN HOUSE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN HOUSE GROUP 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 OPEN HOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN HOUSE GROUP has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and OPEN HOUSE go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and OPEN HOUSE
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 1.83 times less return on investment than OPEN HOUSE. But when comparing it to its historical volatility, KINGBOARD CHEMICAL is 1.21 times less risky than OPEN HOUSE. It trades about 0.03 of its potential returns per unit of risk. OPEN HOUSE GROUP is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,540 in OPEN HOUSE GROUP on September 12, 2024 and sell it today you would earn a total of 60.00 from holding OPEN HOUSE GROUP or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. OPEN HOUSE GROUP
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| OPEN HOUSE GROUP |
KINGBOARD CHEMICAL and OPEN HOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and OPEN HOUSE
The main advantage of trading using opposite KINGBOARD CHEMICAL and OPEN HOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL position performs unexpectedly, OPEN HOUSE 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 OPEN HOUSE will offset losses from the drop in OPEN HOUSE's long position.| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc |
| OPEN HOUSE vs. BW OFFSHORE LTD | OPEN HOUSE vs. AIR PRODCHEMICALS | OPEN HOUSE vs. SIEM OFFSHORE NEW | OPEN HOUSE vs. KINGBOARD CHEMICAL |
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 CEOs Directory module to screen CEOs from public companies around the world.
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