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 The 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
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kennametal and SCXLB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kennametal and The 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 (100.00) in The LS Starrett on January 18, 2025 and sell it today you would earn a total of 100.00 from holding The LS Starrett or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Kennametal vs. The LS Starrett
Performance |
| Timeline |
| Kennametal |
| LS Starrett |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
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. Helmerich and Payne | LS Starrett vs. MYR Group | LS Starrett vs. Park Ohio Holdings | LS Starrett vs. EMCOR Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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