Correlation Between Richardson Electronics and Kering SA
Can any of the company-specific risk be diversified away by investing in both Richardson Electronics and Kering SA 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 Richardson Electronics and Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richardson Electronics and Kering SA, you can compare the effects of market volatilities on Richardson Electronics and Kering SA 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 Richardson Electronics with a short position of Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richardson Electronics and Kering SA.
Diversification Opportunities for Richardson Electronics and Kering SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Richardson and Kering is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Richardson Electronics and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA and Richardson Electronics 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 Richardson Electronics are associated (or correlated) with Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Richardson Electronics i.e., Richardson Electronics and Kering SA go up and down completely randomly.
Pair Corralation between Richardson Electronics and Kering SA
Assuming the 90 days horizon Richardson Electronics is expected to generate 1.24 times more return on investment than Kering SA. However, Richardson Electronics is 1.24 times more volatile than Kering SA. It trades about 0.07 of its potential returns per unit of risk. Kering SA is currently generating about -0.17 per unit of risk. If you would invest 1,332 in Richardson Electronics on October 10, 2024 and sell it today you would earn a total of 26.00 from holding Richardson Electronics or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richardson Electronics vs. Kering SA
Performance |
| Timeline |
| Richardson Electronics |
| Kering SA |
Richardson Electronics and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richardson Electronics and Kering SA
The main advantage of trading using opposite Richardson Electronics and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richardson Electronics position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| Richardson Electronics vs. Apollo Investment Corp | Richardson Electronics vs. MEDCAW INVESTMENTS LS 01 | Richardson Electronics vs. National Beverage Corp | Richardson Electronics vs. CN MODERN DAIRY |
| Kering SA vs. ONWARD MEDICAL BV | Kering SA vs. Sun Life Financial | Kering SA vs. IMAGIN MEDICAL INC | Kering SA vs. REVO INSURANCE SPA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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