Correlation Between Made Tech and Kaufman Et
Can any of the company-specific risk be diversified away by investing in both Made Tech 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 Made Tech and Kaufman Et into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and Kaufman Et Broad, you can compare the effects of market volatilities on Made Tech 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 Made Tech with a short position of Kaufman Et. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Kaufman Et.
Diversification Opportunities for Made Tech and Kaufman Et
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Made and Kaufman is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group 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 Made Tech 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 Made Tech Group 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 Made Tech i.e., Made Tech and Kaufman Et go up and down completely randomly.
Pair Corralation between Made Tech and Kaufman Et
Assuming the 90 days trading horizon Made Tech Group is expected to generate 2.6 times more return on investment than Kaufman Et. However, Made Tech is 2.6 times more volatile than Kaufman Et Broad. It trades about 0.02 of its potential returns per unit of risk. Kaufman Et Broad is currently generating about 0.05 per unit of risk. If you would invest 2,450 in Made Tech Group on September 2, 2024 and sell it today you would lose (150.00) from holding Made Tech Group or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Made Tech Group vs. Kaufman Et Broad
Performance |
| Timeline |
| Made Tech Group |
| Kaufman Et Broad |
Made Tech and Kaufman Et Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Kaufman Et
The main advantage of trading using opposite Made Tech and Kaufman Et positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech 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.| Made Tech vs. Kaufman Et Broad | Made Tech vs. EVS Broadcast Equipment | Made Tech vs. Ecclesiastical Insurance Office | Made Tech vs. Gaztransport et Technigaz |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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