Correlation Between Kontoor Brands and Awilco Drilling
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and Awilco Drilling 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 Awilco Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Awilco Drilling PLC, you can compare the effects of market volatilities on Kontoor Brands and Awilco Drilling 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 Awilco Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Awilco Drilling.
Diversification Opportunities for Kontoor Brands and Awilco Drilling
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kontoor and Awilco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Awilco Drilling PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco Drilling PLC 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 Awilco Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco Drilling PLC has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and Awilco Drilling go up and down completely randomly.
Pair Corralation between Kontoor Brands and Awilco Drilling
Considering the 90-day investment horizon Kontoor Brands is expected to generate 13.19 times less return on investment than Awilco Drilling. But when comparing it to its historical volatility, Kontoor Brands is 24.11 times less risky than Awilco Drilling. It trades about 0.11 of its potential returns per unit of risk. Awilco Drilling PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in Awilco Drilling PLC on August 31, 2024 and sell it today you would lose (808.00) from holding Awilco Drilling PLC or give up 80.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Kontoor Brands vs. Awilco Drilling PLC
Performance |
| Timeline |
| Kontoor Brands |
| Awilco Drilling PLC |
Kontoor Brands and Awilco Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Awilco Drilling
The main advantage of trading using opposite Kontoor Brands and Awilco Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, Awilco Drilling 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 Awilco Drilling will offset losses from the drop in Awilco Drilling's long position.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| Awilco Drilling vs. Oasis Hotel Resort | Awilco Drilling vs. Dine Brands Global | Awilco Drilling vs. Park Hotels Resorts | Awilco Drilling vs. Insteel Industries |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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