Correlation Between Kennametal and LS Starrett
Can any of the company-specific risk be diversified away by investing in both Kennametal and LS Starrett 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 and LS Starrett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kennametal and LS Starrett, you can compare the effects of market volatilities on Kennametal and LS Starrett 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 with a short position of LS Starrett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennametal and LS Starrett.
Diversification Opportunities for Kennametal and LS Starrett
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kennametal and SCX is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kennametal and LS Starrett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LS Starrett and Kennametal 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 are associated (or correlated) with LS Starrett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LS Starrett has no effect on the direction of Kennametal i.e., Kennametal and LS Starrett go up and down completely randomly.
Pair Corralation between Kennametal and LS Starrett
If you would invest 2,493 in Kennametal on August 24, 2024 and sell it today you would earn a total of 390.00 from holding Kennametal or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Kennametal vs. LS Starrett
Performance |
| Timeline |
| Kennametal |
| LS Starrett |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kennametal and LS Starrett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kennametal and LS Starrett
The main advantage of trading using opposite Kennametal and LS Starrett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kennametal position performs unexpectedly, LS Starrett 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 LS Starrett will offset losses from the drop in LS Starrett's long position.| Kennametal vs. Hillman Solutions Corp | Kennametal vs. AB SKF | Kennametal vs. Lincoln Electric Holdings | Kennametal vs. Toro Co |
| LS Starrett vs. Eastern Co | LS Starrett vs. Timken Company | LS Starrett vs. Lincoln Electric Holdings | LS Starrett vs. Hillman Solutions Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |