Correlation Between Kaufman Et and BEBO Health
Can any of the company-specific risk be diversified away by investing in both Kaufman Et and BEBO Health 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 Kaufman Et and BEBO Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Et Broad and BEBO Health SA, you can compare the effects of market volatilities on Kaufman Et and BEBO Health 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 Kaufman Et with a short position of BEBO Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and BEBO Health.
Diversification Opportunities for Kaufman Et and BEBO Health
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kaufman and BEBO is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and BEBO Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEBO Health SA and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with BEBO Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEBO Health SA has no effect on the direction of Kaufman Et i.e., Kaufman Et and BEBO Health go up and down completely randomly.
Pair Corralation between Kaufman Et and BEBO Health
Assuming the 90 days trading horizon Kaufman Et Broad is expected to generate 0.97 times more return on investment than BEBO Health. However, Kaufman Et Broad is 1.03 times less risky than BEBO Health. It trades about 0.06 of its potential returns per unit of risk. BEBO Health SA is currently generating about -0.08 per unit of risk. If you would invest 2,326 in Kaufman Et Broad on August 29, 2024 and sell it today you would earn a total of 834.00 from holding Kaufman Et Broad or generate 35.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaufman Et Broad vs. BEBO Health SA
Performance |
| Timeline |
| Kaufman Et Broad |
| BEBO Health SA |
Kaufman Et and BEBO Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaufman Et and BEBO Health
The main advantage of trading using opposite Kaufman Et and BEBO Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Et position performs unexpectedly, BEBO Health 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 BEBO Health will offset losses from the drop in BEBO Health's long position.The idea behind Kaufman Et Broad and BEBO Health SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |