Correlation Between Kontoor Brands and WesBanco
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands and WesBanco 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 WesBanco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and WesBanco, you can compare the effects of market volatilities on Kontoor Brands and WesBanco 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 WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and WesBanco.
Diversification Opportunities for Kontoor Brands and WesBanco
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kontoor and WesBanco is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco 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 WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Kontoor Brands i.e., Kontoor Brands and WesBanco go up and down completely randomly.
Pair Corralation between Kontoor Brands and WesBanco
Considering the 90-day investment horizon Kontoor Brands is expected to under-perform the WesBanco. In addition to that, Kontoor Brands is 6.76 times more volatile than WesBanco. It trades about -0.01 of its total potential returns per unit of risk. WesBanco is currently generating about 0.1 per unit of volatility. If you would invest 2,511 in WesBanco on September 14, 2024 and sell it today you would earn a total of 14.00 from holding WesBanco or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kontoor Brands vs. WesBanco
Performance |
| Timeline |
| Kontoor Brands |
| WesBanco |
Kontoor Brands and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kontoor Brands and WesBanco
The main advantage of trading using opposite Kontoor Brands and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco's long position.| Kontoor Brands vs. Digital Brands Group | Kontoor Brands vs. Data Storage | Kontoor Brands vs. Auddia Inc | Kontoor Brands vs. DatChat Series A |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |