Correlation Between Klckner Co and Kosmos Energy
Can any of the company-specific risk be diversified away by investing in both Klckner Co and Kosmos Energy 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 Kosmos Energy 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 Kosmos Energy, you can compare the effects of market volatilities on Klckner Co and Kosmos Energy 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 Kosmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Kosmos Energy.
Diversification Opportunities for Klckner Co and Kosmos Energy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Klckner and Kosmos is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE and Kosmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kosmos Energy 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 Kosmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kosmos Energy has no effect on the direction of Klckner Co i.e., Klckner Co and Kosmos Energy go up and down completely randomly.
Pair Corralation between Klckner Co and Kosmos Energy
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Kosmos Energy. In addition to that, Klckner Co is 1.18 times more volatile than Kosmos Energy. It trades about -0.03 of its total potential returns per unit of risk. Kosmos Energy is currently generating about -0.01 per unit of volatility. If you would invest 602.00 in Kosmos Energy on August 24, 2024 and sell it today you would lose (200.00) from holding Kosmos Energy or give up 33.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 66.13% |
| Values | Daily Returns |
Klckner Co SE vs. Kosmos Energy
Performance |
| Timeline |
| Klckner Co SE |
| Kosmos Energy |
Klckner Co and Kosmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and Kosmos Energy
The main advantage of trading using opposite Klckner Co and Kosmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co position performs unexpectedly, Kosmos Energy 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 Kosmos Energy will offset losses from the drop in Kosmos Energy's long position.| Klckner Co vs. Cleveland Cliffs | Klckner Co vs. Nucor Corp | Klckner Co vs. Steel Dynamics | Klckner Co vs. ArcelorMittal SA ADR |
| Kosmos Energy vs. Matador Resources | Kosmos Energy vs. Murphy Oil | Kosmos Energy vs. Civitas Resources | Kosmos Energy vs. Magnolia Oil Gas |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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