Correlation Between Kinaxis and Gildan Activewear
Can any of the company-specific risk be diversified away by investing in both Kinaxis and Gildan Activewear 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 Kinaxis and Gildan Activewear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinaxis and Gildan Activewear, you can compare the effects of market volatilities on Kinaxis and Gildan Activewear 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 Kinaxis with a short position of Gildan Activewear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinaxis and Gildan Activewear.
Diversification Opportunities for Kinaxis and Gildan Activewear
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kinaxis and Gildan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kinaxis and Gildan Activewear in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gildan Activewear and Kinaxis 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 Kinaxis are associated (or correlated) with Gildan Activewear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gildan Activewear has no effect on the direction of Kinaxis i.e., Kinaxis and Gildan Activewear go up and down completely randomly.
Pair Corralation between Kinaxis and Gildan Activewear
Assuming the 90 days trading horizon Kinaxis is expected to generate 2.34 times less return on investment than Gildan Activewear. In addition to that, Kinaxis is 1.17 times more volatile than Gildan Activewear. It trades about 0.03 of its total potential returns per unit of risk. Gildan Activewear is currently generating about 0.08 per unit of volatility. If you would invest 3,772 in Gildan Activewear on August 30, 2024 and sell it today you would earn a total of 3,180 from holding Gildan Activewear or generate 84.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinaxis vs. Gildan Activewear
Performance |
| Timeline |
| Kinaxis |
| Gildan Activewear |
Kinaxis and Gildan Activewear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinaxis and Gildan Activewear
The main advantage of trading using opposite Kinaxis and Gildan Activewear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinaxis position performs unexpectedly, Gildan Activewear 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 Gildan Activewear will offset losses from the drop in Gildan Activewear's long position.| Kinaxis vs. Open Text Corp | Kinaxis vs. Enghouse Systems | Kinaxis vs. Docebo Inc | Kinaxis vs. Descartes Systems Group |
| Gildan Activewear vs. Saputo Inc | Gildan Activewear vs. CCL Industries | Gildan Activewear vs. Thomson Reuters Corp | Gildan Activewear vs. George Weston Limited |
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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