Correlation Between Kontoor Brands and Bowlin Travel
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and Bowlin Travel 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 Bowlin Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Bowlin Travel Centers, you can compare the effects of market volatilities on Kontoor Brands and Bowlin Travel 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 Bowlin Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Bowlin Travel.
Diversification Opportunities for Kontoor Brands and Bowlin Travel
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kontoor and Bowlin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Bowlin Travel Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowlin Travel Centers 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 Bowlin Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowlin Travel Centers has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and Bowlin Travel go up and down completely randomly.
Pair Corralation between Kontoor Brands and Bowlin Travel
Considering the 90-day investment horizon Kontoor Brands is expected to generate 14.26 times more return on investment than Bowlin Travel. However, Kontoor Brands is 14.26 times more volatile than Bowlin Travel Centers. It trades about 0.29 of its potential returns per unit of risk. Bowlin Travel Centers is currently generating about 0.22 per unit of risk. If you would invest 7,757 in Kontoor Brands on August 28, 2024 and sell it today you would earn a total of 1,619 from holding Kontoor Brands or generate 20.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kontoor Brands vs. Bowlin Travel Centers
Performance |
| Timeline |
| Kontoor Brands |
| Bowlin Travel Centers |
Kontoor Brands and Bowlin Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Bowlin Travel
The main advantage of trading using opposite Kontoor Brands and Bowlin Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, Bowlin Travel 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 Bowlin Travel will offset losses from the drop in Bowlin Travel's long position.| Kontoor Brands vs. VF Corporation | Kontoor Brands vs. Levi Strauss Co | Kontoor Brands vs. Under Armour A | Kontoor Brands vs. Oxford Industries |
| Bowlin Travel vs. Willamette Valley Vineyards | Bowlin Travel vs. Compania Cervecerias Unidas | Bowlin Travel vs. Teleflex Incorporated | Bowlin Travel vs. Emerson Radio |
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
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |