Correlation Between Kontoor Brands and Spring Valley
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and Spring Valley 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 Spring Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Spring Valley Acquisition, you can compare the effects of market volatilities on Kontoor Brands and Spring Valley 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 Spring Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Spring Valley.
Diversification Opportunities for Kontoor Brands and Spring Valley
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kontoor and Spring is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Spring Valley Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Valley Acquisition 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 Spring Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Valley Acquisition has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and Spring Valley go up and down completely randomly.
Pair Corralation between Kontoor Brands and Spring Valley
Considering the 90-day investment horizon Kontoor Brands is expected to generate 2.26 times less return on investment than Spring Valley. But when comparing it to its historical volatility, Kontoor Brands is 7.65 times less risky than Spring Valley. It trades about 0.39 of its potential returns per unit of risk. Spring Valley Acquisition is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Spring Valley Acquisition on November 2, 2024 and sell it today you would earn a total of 1.01 from holding Spring Valley Acquisition or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 84.21% |
| Values | Daily Returns |
Kontoor Brands vs. Spring Valley Acquisition
Performance |
| Timeline |
| Kontoor Brands |
| Spring Valley Acquisition |
Kontoor Brands and Spring Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and Spring Valley
The main advantage of trading using opposite Kontoor Brands and Spring Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, Spring Valley 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 Spring Valley will offset losses from the drop in Spring Valley'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 |
| Spring Valley vs. Aduro Clean Technologies | Spring Valley vs. Coda Octopus Group | Spring Valley vs. CTS Corporation | Spring Valley vs. Franklin Wireless Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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