Correlation Between Kirr Marbach and Ab New
Can any of the company-specific risk be diversified away by investing in both Kirr Marbach and Ab New 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 Kirr Marbach and Ab New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirr Marbach Partners and Ab New York, you can compare the effects of market volatilities on Kirr Marbach and Ab New 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 Kirr Marbach with a short position of Ab New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirr Marbach and Ab New.
Diversification Opportunities for Kirr Marbach and Ab New
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kirr and ALNVX is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kirr Marbach Partners and Ab New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab New York and Kirr Marbach 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 Kirr Marbach Partners are associated (or correlated) with Ab New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab New York has no effect on the direction of Kirr Marbach i.e., Kirr Marbach and Ab New go up and down completely randomly.
Pair Corralation between Kirr Marbach and Ab New
Assuming the 90 days horizon Kirr Marbach Partners is expected to generate 4.33 times more return on investment than Ab New. However, Kirr Marbach is 4.33 times more volatile than Ab New York. It trades about 0.06 of its potential returns per unit of risk. Ab New York is currently generating about 0.05 per unit of risk. If you would invest 2,463 in Kirr Marbach Partners on October 11, 2024 and sell it today you would earn a total of 838.00 from holding Kirr Marbach Partners or generate 34.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kirr Marbach Partners vs. Ab New York
Performance |
| Timeline |
| Kirr Marbach Partners |
| Ab New York |
Kirr Marbach and Ab New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirr Marbach and Ab New
The main advantage of trading using opposite Kirr Marbach and Ab New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirr Marbach position performs unexpectedly, Ab New 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 Ab New will offset losses from the drop in Ab New's long position.| Kirr Marbach vs. Touchstone Sands Capital | Kirr Marbach vs. Madison Mid Cap | Kirr Marbach vs. Harbor Mid Cap | Kirr Marbach vs. James Small Cap |
| Ab New vs. Alpsalerian Energy Infrastructure | Ab New vs. Hennessy Bp Energy | Ab New vs. Jennison Natural Resources | Ab New vs. Goehring Rozencwajg Resources |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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