Correlation Between K W and Leo Global
Can any of the company-specific risk be diversified away by investing in both K W and Leo Global 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 K W and Leo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K W Metal and Leo Global Logistics, you can compare the effects of market volatilities on K W and Leo Global 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 K W with a short position of Leo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of K W and Leo Global.
Diversification Opportunities for K W and Leo Global
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KWM and Leo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding K W Metal and Leo Global Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leo Global Logistics and K W 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 K W Metal are associated (or correlated) with Leo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leo Global Logistics has no effect on the direction of K W i.e., K W and Leo Global go up and down completely randomly.
Pair Corralation between K W and Leo Global
Assuming the 90 days trading horizon K W Metal is expected to generate 1.13 times more return on investment than Leo Global. However, K W is 1.13 times more volatile than Leo Global Logistics. It trades about -0.08 of its potential returns per unit of risk. Leo Global Logistics is currently generating about -0.29 per unit of risk. If you would invest 131.00 in K W Metal on September 1, 2024 and sell it today you would lose (4.00) from holding K W Metal or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K W Metal vs. Leo Global Logistics
Performance |
| Timeline |
| K W Metal |
| Leo Global Logistics |
K W and Leo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K W and Leo Global
The main advantage of trading using opposite K W and Leo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K W position performs unexpectedly, Leo Global 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 Leo Global will offset losses from the drop in Leo Global's long position.| K W vs. Masterkool International Public | K W vs. Infraset Public | K W vs. KC Metalsheet Public | K W vs. DOD Biotech Public |
| Leo Global vs. Kerry Express Public | Leo Global vs. Triple i Logistics | Leo Global vs. WICE Logistics PCL | Leo Global vs. Sonic Interfreight Public |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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