Correlation Between Leo Global and K W
Can any of the company-specific risk be diversified away by investing in both Leo Global and K W 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 Leo Global and K W into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leo Global Logistics and K W Metal, you can compare the effects of market volatilities on Leo Global and K W 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 Leo Global with a short position of K W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leo Global and K W.
Diversification Opportunities for Leo Global and K W
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leo and KWM is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Leo Global Logistics and K W Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K W Metal and Leo Global 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 Leo Global Logistics are associated (or correlated) with K W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K W Metal has no effect on the direction of Leo Global i.e., Leo Global and K W go up and down completely randomly.
Pair Corralation between Leo Global and K W
Assuming the 90 days trading horizon Leo Global Logistics is expected to under-perform the K W. But the stock apears to be less risky and, when comparing its historical volatility, Leo Global Logistics is 1.16 times less risky than K W. The stock trades about -0.24 of its potential returns per unit of risk. The K W Metal is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 135.00 in K W Metal on September 3, 2024 and sell it today you would lose (8.00) from holding K W Metal or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leo Global Logistics vs. K W Metal
Performance |
| Timeline |
| Leo Global Logistics |
| K W Metal |
Leo Global and K W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leo Global and K W
The main advantage of trading using opposite Leo Global and K W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leo Global position performs unexpectedly, K W 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 K W will offset losses from the drop in K W's long position.| Leo Global vs. Mega Lifesciences Public | Leo Global vs. Sonic Interfreight Public | Leo Global vs. Jay Mart Public | Leo Global vs. AP Public |
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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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