Correlation Between KENNAMETAL INC and Apple
Can any of the company-specific risk be diversified away by investing in both KENNAMETAL INC and Apple 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 KENNAMETAL INC and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENNAMETAL INC and Apple Inc, you can compare the effects of market volatilities on KENNAMETAL INC and Apple 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 KENNAMETAL INC with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENNAMETAL INC and Apple.
Diversification Opportunities for KENNAMETAL INC and Apple
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KENNAMETAL and Apple is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KENNAMETAL INC and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and KENNAMETAL INC 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 KENNAMETAL INC are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of KENNAMETAL INC i.e., KENNAMETAL INC and Apple go up and down completely randomly.
Pair Corralation between KENNAMETAL INC and Apple
Assuming the 90 days trading horizon KENNAMETAL INC is expected to generate 1.85 times less return on investment than Apple. In addition to that, KENNAMETAL INC is 1.37 times more volatile than Apple Inc. It trades about 0.03 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.08 per unit of volatility. If you would invest 13,210 in Apple Inc on August 28, 2024 and sell it today you would earn a total of 8,680 from holding Apple Inc or generate 65.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENNAMETAL INC vs. Apple Inc
Performance |
| Timeline |
| KENNAMETAL INC |
| Apple Inc |
KENNAMETAL INC and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENNAMETAL INC and Apple
The main advantage of trading using opposite KENNAMETAL INC and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENNAMETAL INC position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Microsoft |
| Apple vs. Summit Materials | Apple vs. Lion One Metals | Apple vs. SANOK RUBBER ZY | Apple vs. Goodyear Tire Rubber |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |