Correlation Between MMA Offshore and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both MMA Offshore 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 MMA Offshore and Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MMA Offshore Limited and Kontoor Brands, you can compare the effects of market volatilities on MMA Offshore 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 MMA Offshore with a short position of Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMA Offshore and Kontoor Brands.
Diversification Opportunities for MMA Offshore and Kontoor Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MMA and Kontoor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MMA Offshore Limited and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands and MMA Offshore 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 MMA Offshore Limited 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 MMA Offshore i.e., MMA Offshore and Kontoor Brands go up and down completely randomly.
Pair Corralation between MMA Offshore and Kontoor Brands
Assuming the 90 days horizon MMA Offshore Limited is expected to generate 17.9 times more return on investment than Kontoor Brands. However, MMA Offshore is 17.9 times more volatile than Kontoor Brands. It trades about 0.05 of its potential returns per unit of risk. Kontoor Brands is currently generating about 0.09 per unit of risk. If you would invest 16.00 in MMA Offshore Limited on September 14, 2024 and sell it today you would earn a total of 134.00 from holding MMA Offshore Limited or generate 837.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 80.2% |
| Values | Daily Returns |
MMA Offshore Limited vs. Kontoor Brands
Performance |
| Timeline |
| MMA Offshore Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kontoor Brands |
MMA Offshore and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMA Offshore and Kontoor Brands
The main advantage of trading using opposite MMA Offshore and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMA Offshore 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.| MMA Offshore vs. Weibo Corp | MMA Offshore vs. HF Sinclair Corp | MMA Offshore vs. Mesa Air Group | MMA Offshore vs. Sphere Entertainment Co |
| Kontoor Brands vs. Digital Brands Group | Kontoor Brands vs. Data Storage | Kontoor Brands vs. Auddia Inc | Kontoor Brands vs. DatChat Series A |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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