Correlation Between Perimeter Solutions and Kronos Worldwide
Can any of the company-specific risk be diversified away by investing in both Perimeter Solutions and Kronos Worldwide 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 Perimeter Solutions and Kronos Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perimeter Solutions SA and Kronos Worldwide, you can compare the effects of market volatilities on Perimeter Solutions and Kronos Worldwide 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 Perimeter Solutions with a short position of Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Solutions and Kronos Worldwide.
Diversification Opportunities for Perimeter Solutions and Kronos Worldwide
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Perimeter and Kronos is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Solutions SA and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide and Perimeter Solutions 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 Perimeter Solutions SA are associated (or correlated) with Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of Perimeter Solutions i.e., Perimeter Solutions and Kronos Worldwide go up and down completely randomly.
Pair Corralation between Perimeter Solutions and Kronos Worldwide
Considering the 90-day investment horizon Perimeter Solutions SA is expected to generate 0.99 times more return on investment than Kronos Worldwide. However, Perimeter Solutions SA is 1.01 times less risky than Kronos Worldwide. It trades about 0.17 of its potential returns per unit of risk. Kronos Worldwide is currently generating about -0.04 per unit of risk. If you would invest 751.00 in Perimeter Solutions SA on August 24, 2024 and sell it today you would earn a total of 546.00 from holding Perimeter Solutions SA or generate 72.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perimeter Solutions SA vs. Kronos Worldwide
Performance |
| Timeline |
| Perimeter Solutions |
| Kronos Worldwide |
Perimeter Solutions and Kronos Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perimeter Solutions and Kronos Worldwide
The main advantage of trading using opposite Perimeter Solutions and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perimeter Solutions position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide's long position.| Perimeter Solutions vs. Eastman Chemical | Perimeter Solutions vs. Olin Corporation | Perimeter Solutions vs. LyondellBasell Industries NV | Perimeter Solutions vs. Air Products and |
| Kronos Worldwide vs. Eastman Chemical | Kronos Worldwide vs. Olin Corporation | Kronos Worldwide vs. LyondellBasell Industries NV | Kronos Worldwide vs. Air Products and |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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