Correlation Between NYSE Composite and Kingboard Chemical
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Kingboard Chemical 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 NYSE Composite and Kingboard Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Kingboard Chemical Holdings, you can compare the effects of market volatilities on NYSE Composite and Kingboard Chemical 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 NYSE Composite with a short position of Kingboard Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Kingboard Chemical.
Diversification Opportunities for NYSE Composite and Kingboard Chemical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Kingboard is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Kingboard Chemical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingboard Chemical and NYSE Composite 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 NYSE Composite are associated (or correlated) with Kingboard Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingboard Chemical has no effect on the direction of NYSE Composite i.e., NYSE Composite and Kingboard Chemical go up and down completely randomly.
Pair Corralation between NYSE Composite and Kingboard Chemical
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.52 times more return on investment than Kingboard Chemical. However, NYSE Composite is 1.93 times less risky than Kingboard Chemical. It trades about 0.06 of its potential returns per unit of risk. Kingboard Chemical Holdings is currently generating about -0.02 per unit of risk. If you would invest 1,599,940 in NYSE Composite on October 25, 2024 and sell it today you would earn a total of 382,822 from holding NYSE Composite or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Kingboard Chemical Holdings
Performance |
| Timeline |
NYSE Composite and Kingboard Chemical Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Kingboard Chemical Holdings
Pair trading matchups for Kingboard Chemical
Pair Trading with NYSE Composite and Kingboard Chemical
The main advantage of trading using opposite NYSE Composite and Kingboard Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Kingboard Chemical 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 Kingboard Chemical will offset losses from the drop in Kingboard Chemical's long position.| NYSE Composite vs. Tesla Inc | NYSE Composite vs. Sea | NYSE Composite vs. NETGEAR | NYSE Composite vs. Gentex |
| Kingboard Chemical vs. Western Digital | Kingboard Chemical vs. Asbury Automotive Group | Kingboard Chemical vs. Molecular Partners AG | Kingboard Chemical vs. Valneva SE ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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