Correlation Between Kornit Digital and Flowserve
Can any of the company-specific risk be diversified away by investing in both Kornit Digital and Flowserve 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 Kornit Digital and Flowserve into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kornit Digital and Flowserve, you can compare the effects of market volatilities on Kornit Digital and Flowserve 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 Kornit Digital with a short position of Flowserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kornit Digital and Flowserve.
Diversification Opportunities for Kornit Digital and Flowserve
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kornit and Flowserve is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kornit Digital and Flowserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowserve and Kornit Digital 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 Kornit Digital are associated (or correlated) with Flowserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowserve has no effect on the direction of Kornit Digital i.e., Kornit Digital and Flowserve go up and down completely randomly.
Pair Corralation between Kornit Digital and Flowserve
Given the investment horizon of 90 days Kornit Digital is expected to generate 1.27 times less return on investment than Flowserve. In addition to that, Kornit Digital is 2.13 times more volatile than Flowserve. It trades about 0.04 of its total potential returns per unit of risk. Flowserve is currently generating about 0.1 per unit of volatility. If you would invest 2,883 in Flowserve on September 2, 2024 and sell it today you would earn a total of 3,219 from holding Flowserve or generate 111.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kornit Digital vs. Flowserve
Performance |
| Timeline |
| Kornit Digital |
| Flowserve |
Kornit Digital and Flowserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kornit Digital and Flowserve
The main advantage of trading using opposite Kornit Digital and Flowserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kornit Digital position performs unexpectedly, Flowserve 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 Flowserve will offset losses from the drop in Flowserve's long position.| Kornit Digital vs. Middleby Corp | Kornit Digital vs. Enpro Industries | Kornit Digital vs. Kadant Inc | Kornit Digital vs. ITT Inc |
| Flowserve vs. IDEX Corporation | Flowserve vs. Donaldson | Flowserve vs. Ingersoll Rand | Flowserve vs. Franklin Electric Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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