Correlation Between KENNAMETAL INC and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both KENNAMETAL INC and AOI Electronics 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 AOI Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENNAMETAL INC and AOI Electronics Co, you can compare the effects of market volatilities on KENNAMETAL INC and AOI Electronics 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 AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENNAMETAL INC and AOI Electronics.
Diversification Opportunities for KENNAMETAL INC and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KENNAMETAL and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KENNAMETAL INC and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of KENNAMETAL INC i.e., KENNAMETAL INC and AOI Electronics go up and down completely randomly.
Pair Corralation between KENNAMETAL INC and AOI Electronics
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 | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
KENNAMETAL INC vs. AOI Electronics Co
Performance |
| Timeline |
| KENNAMETAL INC |
| AOI Electronics |
KENNAMETAL INC and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENNAMETAL INC and AOI Electronics
The main advantage of trading using opposite KENNAMETAL INC and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENNAMETAL INC position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' 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 |
| AOI Electronics vs. NVIDIA | AOI Electronics vs. NVIDIA | AOI Electronics vs. Taiwan Semiconductor Manufacturing | AOI Electronics vs. QUALCOMM Incorporated |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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