Correlation Between KENNAMETAL INC and Volkswagen
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By analyzing existing cross correlation between KENNAMETAL INC and Volkswagen AG VZO, you can compare the effects of market volatilities on KENNAMETAL INC and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENNAMETAL INC and Volkswagen.
Diversification Opportunities for KENNAMETAL INC and Volkswagen
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KENNAMETAL and Volkswagen is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding KENNAMETAL INC and Volkswagen AG VZO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG VZO 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG VZO has no effect on the direction of KENNAMETAL INC i.e., KENNAMETAL INC and Volkswagen go up and down completely randomly.
Pair Corralation between KENNAMETAL INC and Volkswagen
Assuming the 90 days trading horizon KENNAMETAL INC is expected to generate 2.67 times more return on investment than Volkswagen. However, KENNAMETAL INC is 2.67 times more volatile than Volkswagen AG VZO. It trades about 0.23 of its potential returns per unit of risk. Volkswagen AG VZO is currently generating about -0.38 per unit of risk. If you would invest 2,283 in KENNAMETAL INC on August 29, 2024 and sell it today you would earn a total of 497.00 from holding KENNAMETAL INC or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENNAMETAL INC vs. Volkswagen AG VZO
Performance |
| Timeline |
| KENNAMETAL INC |
| Volkswagen AG VZO |
KENNAMETAL INC and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENNAMETAL INC and Volkswagen
The main advantage of trading using opposite KENNAMETAL INC and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENNAMETAL INC position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Microsoft | KENNAMETAL INC vs. Microsoft |
| Volkswagen vs. Superior Plus Corp | Volkswagen vs. NMI Holdings | Volkswagen vs. Origin Agritech | Volkswagen vs. SIVERS SEMICONDUCTORS AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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