Correlation Between KCE EL and TTM Technologies
Can any of the company-specific risk be diversified away by investing in both KCE EL and TTM Technologies 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 KCE EL and TTM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCE EL PCL and TTM Technologies, you can compare the effects of market volatilities on KCE EL and TTM Technologies 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 KCE EL with a short position of TTM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE EL and TTM Technologies.
Diversification Opportunities for KCE EL and TTM Technologies
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KCE and TTM is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding KCE EL PCL and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies and KCE EL 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 KCE EL PCL are associated (or correlated) with TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of KCE EL i.e., KCE EL and TTM Technologies go up and down completely randomly.
Pair Corralation between KCE EL and TTM Technologies
Assuming the 90 days trading horizon KCE EL PCL is expected to under-perform the TTM Technologies. In addition to that, KCE EL is 1.55 times more volatile than TTM Technologies. It trades about -0.42 of its total potential returns per unit of risk. TTM Technologies is currently generating about 0.28 per unit of volatility. If you would invest 2,000 in TTM Technologies on September 4, 2024 and sell it today you would earn a total of 280.00 from holding TTM Technologies or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KCE EL PCL vs. TTM Technologies
Performance |
| Timeline |
| KCE EL PCL |
| TTM Technologies |
KCE EL and TTM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE EL and TTM Technologies
The main advantage of trading using opposite KCE EL and TTM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE EL position performs unexpectedly, TTM Technologies 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 TTM Technologies will offset losses from the drop in TTM Technologies' long position.| KCE EL vs. INTERSHOP Communications Aktiengesellschaft | KCE EL vs. BJs Restaurants | KCE EL vs. Charter Communications | KCE EL vs. Methode Electronics |
| TTM Technologies vs. EBRO FOODS | TTM Technologies vs. Cal Maine Foods | TTM Technologies vs. KB HOME | TTM Technologies vs. Tyson Foods |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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