Correlation Between Park Electrochemical and Kaman
Can any of the company-specific risk be diversified away by investing in both Park Electrochemical and Kaman 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 Park Electrochemical and Kaman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Electrochemical and Kaman, you can compare the effects of market volatilities on Park Electrochemical and Kaman 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 Park Electrochemical with a short position of Kaman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Electrochemical and Kaman.
Diversification Opportunities for Park Electrochemical and Kaman
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Park and Kaman is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical and Kaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaman and Park Electrochemical 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 Park Electrochemical are associated (or correlated) with Kaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaman has no effect on the direction of Park Electrochemical i.e., Park Electrochemical and Kaman go up and down completely randomly.
Pair Corralation between Park Electrochemical and Kaman
If you would invest 1,453 in Park Electrochemical on August 23, 2024 and sell it today you would earn a total of 50.00 from holding Park Electrochemical or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Park Electrochemical vs. Kaman
Performance |
| Timeline |
| Park Electrochemical |
| Kaman |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Park Electrochemical and Kaman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Electrochemical and Kaman
The main advantage of trading using opposite Park Electrochemical and Kaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Electrochemical position performs unexpectedly, Kaman 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 Kaman will offset losses from the drop in Kaman's long position.| Park Electrochemical vs. Small Cap Core | Park Electrochemical vs. Freedom Holding Corp | Park Electrochemical vs. Gfl Environmental Holdings | Park Electrochemical vs. Growth Fund Of |
| Kaman vs. Ducommun Incorporated | Kaman vs. Innovative Solutions and | Kaman vs. National Presto Industries | Kaman vs. Astronics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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