Correlation Between KENNAMETAL INC and Lion One
Can any of the company-specific risk be diversified away by investing in both KENNAMETAL INC and Lion One 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 Lion One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENNAMETAL INC and Lion One Metals, you can compare the effects of market volatilities on KENNAMETAL INC and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENNAMETAL INC and Lion One.
Diversification Opportunities for KENNAMETAL INC and Lion One
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KENNAMETAL and Lion is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding KENNAMETAL INC and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of KENNAMETAL INC i.e., KENNAMETAL INC and Lion One go up and down completely randomly.
Pair Corralation between KENNAMETAL INC and Lion One
Assuming the 90 days trading horizon KENNAMETAL INC is expected to generate 0.38 times more return on investment than Lion One. However, KENNAMETAL INC is 2.66 times less risky than Lion One. It trades about 0.06 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.06 per unit of risk. If you would invest 2,030 in KENNAMETAL INC on August 24, 2024 and sell it today you would earn a total of 630.00 from holding KENNAMETAL INC or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
KENNAMETAL INC vs. Lion One Metals
Performance |
| Timeline |
| KENNAMETAL INC |
| Lion One Metals |
KENNAMETAL INC and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENNAMETAL INC and Lion One
The main advantage of trading using opposite KENNAMETAL INC and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENNAMETAL INC position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One's long position.| KENNAMETAL INC vs. Hollywood Bowl Group | KENNAMETAL INC vs. TOWNSQUARE MEDIA INC | KENNAMETAL INC vs. Live Nation Entertainment | KENNAMETAL INC vs. XLMedia PLC |
| Lion One vs. Franco Nevada | Lion One vs. Agnico Eagle Mines | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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