Correlation Between Transport International and KOWORLD AG
Can any of the company-specific risk be diversified away by investing in both Transport International and KOWORLD AG 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 Transport International and KOWORLD AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and KOWORLD AG, you can compare the effects of market volatilities on Transport International and KOWORLD AG 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 Transport International with a short position of KOWORLD AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and KOWORLD AG.
Diversification Opportunities for Transport International and KOWORLD AG
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Transport and KOWORLD is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD AG and Transport International 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 Transport International Holdings are associated (or correlated) with KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of Transport International i.e., Transport International and KOWORLD AG go up and down completely randomly.
Pair Corralation between Transport International and KOWORLD AG
Assuming the 90 days horizon Transport International Holdings is expected to under-perform the KOWORLD AG. But the stock apears to be less risky and, when comparing its historical volatility, Transport International Holdings is 2.03 times less risky than KOWORLD AG. The stock trades about -0.17 of its potential returns per unit of risk. The KOWORLD AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,800 in KOWORLD AG on October 25, 2024 and sell it today you would earn a total of 10.00 from holding KOWORLD AG or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. KOWORLD AG
Performance |
| Timeline |
| Transport International |
| KOWORLD AG |
Transport International and KOWORLD AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and KOWORLD AG
The main advantage of trading using opposite Transport International and KOWORLD AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International position performs unexpectedly, KOWORLD AG 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 KOWORLD AG will offset losses from the drop in KOWORLD AG's long position.| Transport International vs. Tianjin Capital Environmental | Transport International vs. Renesas Electronics | Transport International vs. Olympic Steel | Transport International vs. TT Electronics PLC |
| KOWORLD AG vs. Keck Seng Investments | KOWORLD AG vs. FIRST SAVINGS FINL | KOWORLD AG vs. Vishay Intertechnology | KOWORLD AG vs. SLR Investment 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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