Correlation Between Premium Brands and Kinaxis
Can any of the company-specific risk be diversified away by investing in both Premium Brands and Kinaxis 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 Premium Brands and Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Brands Holdings and Kinaxis, you can compare the effects of market volatilities on Premium Brands and Kinaxis 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 Premium Brands with a short position of Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Brands and Kinaxis.
Diversification Opportunities for Premium Brands and Kinaxis
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premium and Kinaxis is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Premium Brands Holdings and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Premium Brands 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 Premium Brands Holdings are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Premium Brands i.e., Premium Brands and Kinaxis go up and down completely randomly.
Pair Corralation between Premium Brands and Kinaxis
Assuming the 90 days trading horizon Premium Brands is expected to generate 7.07 times less return on investment than Kinaxis. But when comparing it to its historical volatility, Premium Brands Holdings is 1.63 times less risky than Kinaxis. It trades about 0.01 of its potential returns per unit of risk. Kinaxis is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 14,842 in Kinaxis on August 30, 2024 and sell it today you would earn a total of 3,101 from holding Kinaxis or generate 20.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Brands Holdings vs. Kinaxis
Performance |
| Timeline |
| Premium Brands Holdings |
| Kinaxis |
Premium Brands and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Brands and Kinaxis
The main advantage of trading using opposite Premium Brands and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Brands position performs unexpectedly, Kinaxis 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 Kinaxis will offset losses from the drop in Kinaxis' long position.| Premium Brands vs. CCL Industries | Premium Brands vs. North West | Premium Brands vs. Maple Leaf Foods | Premium Brands vs. FirstService Corp |
| Kinaxis vs. Open Text Corp | Kinaxis vs. Enghouse Systems | Kinaxis vs. Docebo Inc | Kinaxis vs. Descartes Systems Group |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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