Correlation Between Klckner Co and Buyer Group
Can any of the company-specific risk be diversified away by investing in both Klckner Co and Buyer Group 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 Klckner Co and Buyer Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Buyer Group International, you can compare the effects of market volatilities on Klckner Co and Buyer Group 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 Klckner Co with a short position of Buyer Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Buyer Group.
Diversification Opportunities for Klckner Co and Buyer Group
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Klckner and Buyer is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE and Buyer Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyer Group International and Klckner Co 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 Klckner Co SE are associated (or correlated) with Buyer Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyer Group International has no effect on the direction of Klckner Co i.e., Klckner Co and Buyer Group go up and down completely randomly.
Pair Corralation between Klckner Co and Buyer Group
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Buyer Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Klckner Co SE is 1.98 times less risky than Buyer Group. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Buyer Group International is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 0.21 in Buyer Group International on August 25, 2024 and sell it today you would lose (0.08) from holding Buyer Group International or give up 38.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.42% |
| Values | Daily Returns |
Klckner Co SE vs. Buyer Group International
Performance |
| Timeline |
| Klckner Co SE |
| Buyer Group International |
Klckner Co and Buyer Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and Buyer Group
The main advantage of trading using opposite Klckner Co and Buyer Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co position performs unexpectedly, Buyer Group 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 Buyer Group will offset losses from the drop in Buyer Group's long position.| Klckner Co vs. Olympic Steel | Klckner Co vs. Mesabi Trust | Klckner Co vs. Universal Stainless Alloy | Klckner Co vs. POSCO Holdings |
| Buyer Group vs. Morningstar Unconstrained Allocation | Buyer Group vs. High Yield Municipal Fund | Buyer Group vs. Knife River | Buyer Group vs. Klckner Co SE |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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