Correlation Between Marine Products and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Marine Products and Kontoor Brands 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 Marine Products and Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Products and Kontoor Brands, you can compare the effects of market volatilities on Marine Products and Kontoor Brands 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 Marine Products with a short position of Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Kontoor Brands.
Diversification Opportunities for Marine Products and Kontoor Brands
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marine and Kontoor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands and Marine Products 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 Marine Products are associated (or correlated) with Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Marine Products i.e., Marine Products and Kontoor Brands go up and down completely randomly.
Pair Corralation between Marine Products and Kontoor Brands
Considering the 90-day investment horizon Marine Products is expected to generate 71.46 times less return on investment than Kontoor Brands. In addition to that, Marine Products is 1.06 times more volatile than Kontoor Brands. It trades about 0.0 of its total potential returns per unit of risk. Kontoor Brands is currently generating about 0.13 per unit of volatility. If you would invest 5,782 in Kontoor Brands on August 27, 2024 and sell it today you would earn a total of 3,356 from holding Kontoor Brands or generate 58.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Products vs. Kontoor Brands
Performance |
| Timeline |
| Marine Products |
| Kontoor Brands |
Marine Products and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Products and Kontoor Brands
The main advantage of trading using opposite Marine Products and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Products position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
| Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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