Correlation Between London Security and Kaufman Et
Can any of the company-specific risk be diversified away by investing in both London Security and Kaufman Et 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 London Security and Kaufman Et into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between London Security Plc and Kaufman Et Broad, you can compare the effects of market volatilities on London Security and Kaufman Et 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 London Security with a short position of Kaufman Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of London Security and Kaufman Et.
Diversification Opportunities for London Security and Kaufman Et
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between London and Kaufman is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding London Security Plc and Kaufman Et Broad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Et Broad and London Security 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 London Security Plc are associated (or correlated) with Kaufman Et. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Et Broad has no effect on the direction of London Security i.e., London Security and Kaufman Et go up and down completely randomly.
Pair Corralation between London Security and Kaufman Et
Assuming the 90 days trading horizon London Security Plc is expected to generate 0.65 times more return on investment than Kaufman Et. However, London Security Plc is 1.54 times less risky than Kaufman Et. It trades about 0.08 of its potential returns per unit of risk. Kaufman Et Broad is currently generating about 0.01 per unit of risk. If you would invest 294,207 in London Security Plc on September 24, 2024 and sell it today you would earn a total of 45,793 from holding London Security Plc or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
London Security Plc vs. Kaufman Et Broad
Performance |
| Timeline |
| London Security Plc |
| Kaufman Et Broad |
London Security and Kaufman Et Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with London Security and Kaufman Et
The main advantage of trading using opposite London Security and Kaufman Et positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if London Security position performs unexpectedly, Kaufman Et 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 Kaufman Et will offset losses from the drop in Kaufman Et's long position.| London Security vs. Samsung Electronics Co | London Security vs. Samsung Electronics Co | London Security vs. Hyundai Motor | London Security vs. Toyota Motor Corp |
| Kaufman Et vs. Uniper SE | Kaufman Et vs. Mulberry Group PLC | Kaufman Et vs. London Security Plc | Kaufman Et vs. Triad Group PLC |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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