Correlation Between Middleby Corp and Kadant
Can any of the company-specific risk be diversified away by investing in both Middleby Corp and Kadant 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 Middleby Corp and Kadant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middleby Corp and Kadant Inc, you can compare the effects of market volatilities on Middleby Corp and Kadant 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 Middleby Corp with a short position of Kadant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middleby Corp and Kadant.
Diversification Opportunities for Middleby Corp and Kadant
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Middleby and Kadant is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Middleby Corp and Kadant Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kadant Inc and Middleby Corp 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 Middleby Corp are associated (or correlated) with Kadant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kadant Inc has no effect on the direction of Middleby Corp i.e., Middleby Corp and Kadant go up and down completely randomly.
Pair Corralation between Middleby Corp and Kadant
Given the investment horizon of 90 days Middleby Corp is expected to generate 1.72 times less return on investment than Kadant. But when comparing it to its historical volatility, Middleby Corp is 1.03 times less risky than Kadant. It trades about 0.04 of its potential returns per unit of risk. Kadant Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 26,009 in Kadant Inc on November 9, 2024 and sell it today you would earn a total of 10,928 from holding Kadant Inc or generate 42.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Middleby Corp vs. Kadant Inc
Performance |
| Timeline |
| Middleby Corp |
| Kadant Inc |
Middleby Corp and Kadant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middleby Corp and Kadant
The main advantage of trading using opposite Middleby Corp and Kadant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middleby Corp position performs unexpectedly, Kadant 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 Kadant will offset losses from the drop in Kadant's long position.| Middleby Corp vs. Enpro Industries | Middleby Corp vs. Kadant Inc | Middleby Corp vs. ITT Inc | Middleby Corp vs. Franklin Electric Co |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| CEOs Directory Screen CEOs from public companies around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |