Correlation Between Kontoor Brands and Greene Concepts
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and Greene Concepts 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 Greene Concepts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Greene Concepts, you can compare the effects of market volatilities on Kontoor Brands and Greene Concepts 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 Greene Concepts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Greene Concepts.
Diversification Opportunities for Kontoor Brands and Greene Concepts
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kontoor and Greene is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Greene Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greene Concepts 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 Greene Concepts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greene Concepts has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and Greene Concepts go up and down completely randomly.
Pair Corralation between Kontoor Brands and Greene Concepts
Considering the 90-day investment horizon Kontoor Brands is expected to generate 0.25 times more return on investment than Greene Concepts. However, Kontoor Brands is 4.07 times less risky than Greene Concepts. It trades about 0.11 of its potential returns per unit of risk. Greene Concepts is currently generating about -0.01 per unit of risk. If you would invest 4,119 in Kontoor Brands on August 31, 2024 and sell it today you would earn a total of 5,059 from holding Kontoor Brands or generate 122.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Kontoor Brands vs. Greene Concepts
Performance |
| Timeline |
| Kontoor Brands |
| Greene Concepts |
Kontoor Brands and Greene Concepts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Greene Concepts
The main advantage of trading using opposite Kontoor Brands and Greene Concepts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, Greene Concepts 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 Greene Concepts will offset losses from the drop in Greene Concepts' long position.| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
| Greene Concepts vs. High Performance Beverages | Greene Concepts vs. V Group | Greene Concepts vs. Fbec Worldwide | Greene Concepts vs. Hiru Corporation |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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