Correlation Between Kontoor Brands and Everest Consolidator
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and Everest Consolidator 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 Everest Consolidator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Everest Consolidator Acquisition, you can compare the effects of market volatilities on Kontoor Brands and Everest Consolidator 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 Everest Consolidator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Everest Consolidator.
Diversification Opportunities for Kontoor Brands and Everest Consolidator
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kontoor and Everest is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Everest Consolidator Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Consolidator 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 Everest Consolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Consolidator has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and Everest Consolidator go up and down completely randomly.
Pair Corralation between Kontoor Brands and Everest Consolidator
Considering the 90-day investment horizon Kontoor Brands is expected to generate 1.67 times more return on investment than Everest Consolidator. However, Kontoor Brands is 1.67 times more volatile than Everest Consolidator Acquisition. It trades about 0.09 of its potential returns per unit of risk. Everest Consolidator Acquisition is currently generating about 0.01 per unit of risk. If you would invest 5,772 in Kontoor Brands on September 12, 2024 and sell it today you would earn a total of 3,156 from holding Kontoor Brands or generate 54.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Kontoor Brands vs. Everest Consolidator Acquisiti
Performance |
| Timeline |
| Kontoor Brands |
| Everest Consolidator |
Kontoor Brands and Everest Consolidator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Everest Consolidator
The main advantage of trading using opposite Kontoor Brands and Everest Consolidator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, Everest Consolidator 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 Everest Consolidator will offset losses from the drop in Everest Consolidator'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 |
| Everest Consolidator vs. Kontoor Brands | Everest Consolidator vs. Anheuser Busch Inbev | Everest Consolidator vs. Tandy Leather Factory | Everest Consolidator vs. Vera Bradley |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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