Correlation Between Kontoor Brands and Amer Sports,
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and Amer Sports, 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 Kontoor Brands and Amer Sports, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Amer Sports,, you can compare the effects of market volatilities on Kontoor Brands and Amer Sports, 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 Kontoor Brands with a short position of Amer Sports,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Amer Sports,.
Diversification Opportunities for Kontoor Brands and Amer Sports,
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kontoor and Amer is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, and Kontoor Brands 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 Kontoor Brands are associated (or correlated) with Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and Amer Sports, go up and down completely randomly.
Pair Corralation between Kontoor Brands and Amer Sports,
Considering the 90-day investment horizon Kontoor Brands is expected to generate 3.76 times less return on investment than Amer Sports,. But when comparing it to its historical volatility, Kontoor Brands is 1.28 times less risky than Amer Sports,. It trades about 0.12 of its potential returns per unit of risk. Amer Sports, is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,816 in Amer Sports, on September 25, 2024 and sell it today you would earn a total of 1,048 from holding Amer Sports, or generate 57.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. Amer Sports,
Performance |
| Timeline |
| Kontoor Brands |
| Amer Sports, |
Kontoor Brands and Amer Sports, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Amer Sports,
The main advantage of trading using opposite Kontoor Brands and Amer Sports, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, Amer Sports, 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 Amer Sports, will offset losses from the drop in Amer Sports,'s long position.| Kontoor Brands vs. Amer Sports, | Kontoor Brands vs. Brunswick | Kontoor Brands vs. BRP Inc | Kontoor Brands vs. Vision Marine Technologies |
| Amer Sports, vs. AMREP | Amer Sports, vs. Franklin Street Properties | Amer Sports, vs. Pearson PLC ADR | Amer Sports, vs. John Wiley Sons |
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.
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