Correlation Between Kinea Rendimentos and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both Kinea Rendimentos and Lowes Companies 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 Kinea Rendimentos and Lowes Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinea Rendimentos Imobilirios and Lowes Companies, you can compare the effects of market volatilities on Kinea Rendimentos and Lowes Companies 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 Kinea Rendimentos with a short position of Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinea Rendimentos and Lowes Companies.
Diversification Opportunities for Kinea Rendimentos and Lowes Companies
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kinea and Lowes is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kinea Rendimentos Imobilirios and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies and Kinea Rendimentos 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 Kinea Rendimentos Imobilirios are associated (or correlated) with Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of Kinea Rendimentos i.e., Kinea Rendimentos and Lowes Companies go up and down completely randomly.
Pair Corralation between Kinea Rendimentos and Lowes Companies
Assuming the 90 days trading horizon Kinea Rendimentos is expected to generate 8.3 times less return on investment than Lowes Companies. But when comparing it to its historical volatility, Kinea Rendimentos Imobilirios is 4.95 times less risky than Lowes Companies. It trades about 0.09 of its potential returns per unit of risk. Lowes Companies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,584 in Lowes Companies on August 30, 2024 and sell it today you would earn a total of 368.00 from holding Lowes Companies or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinea Rendimentos Imobilirios vs. Lowes Companies
Performance |
| Timeline |
| Kinea Rendimentos |
| Lowes Companies |
Kinea Rendimentos and Lowes Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinea Rendimentos and Lowes Companies
The main advantage of trading using opposite Kinea Rendimentos and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinea Rendimentos position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.| Kinea Rendimentos vs. Energisa SA | Kinea Rendimentos vs. BTG Pactual Logstica | Kinea Rendimentos vs. Plano Plano Desenvolvimento | Kinea Rendimentos vs. The Procter Gamble |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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