Correlation Between Kronos Advanced and Element Solutions
Can any of the company-specific risk be diversified away by investing in both Kronos Advanced and Element Solutions 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 Kronos Advanced and Element Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kronos Advanced Technologies and Element Solutions, you can compare the effects of market volatilities on Kronos Advanced and Element Solutions 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 Kronos Advanced with a short position of Element Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kronos Advanced and Element Solutions.
Diversification Opportunities for Kronos Advanced and Element Solutions
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kronos and Element is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kronos Advanced Technologies and Element Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Solutions and Kronos Advanced 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 Kronos Advanced Technologies are associated (or correlated) with Element Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Solutions has no effect on the direction of Kronos Advanced i.e., Kronos Advanced and Element Solutions go up and down completely randomly.
Pair Corralation between Kronos Advanced and Element Solutions
Given the investment horizon of 90 days Kronos Advanced Technologies is expected to generate 8.57 times more return on investment than Element Solutions. However, Kronos Advanced is 8.57 times more volatile than Element Solutions. It trades about 0.07 of its potential returns per unit of risk. Element Solutions is currently generating about 0.08 per unit of risk. If you would invest 1.12 in Kronos Advanced Technologies on August 30, 2024 and sell it today you would lose (0.29) from holding Kronos Advanced Technologies or give up 25.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kronos Advanced Technologies vs. Element Solutions
Performance |
| Timeline |
| Kronos Advanced Tech |
| Element Solutions |
Kronos Advanced and Element Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kronos Advanced and Element Solutions
The main advantage of trading using opposite Kronos Advanced and Element Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kronos Advanced position performs unexpectedly, Element Solutions 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 Element Solutions will offset losses from the drop in Element Solutions' long position.| Kronos Advanced vs. TPT Global Tech | Kronos Advanced vs. TOMI Environmental Solutions | Kronos Advanced vs. Vystar Corp | Kronos Advanced vs. Alternet Systems |
| Element Solutions vs. Oil Dri | Element Solutions vs. Quaker Chemical | Element Solutions vs. Ecovyst | Element Solutions vs. Minerals Technologies |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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