Correlation Between Rev and Kion Group
Can any of the company-specific risk be diversified away by investing in both Rev and Kion Group 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 Rev and Kion Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rev Group and Kion Group AG, you can compare the effects of market volatilities on Rev and Kion Group 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 Rev with a short position of Kion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rev and Kion Group.
Diversification Opportunities for Rev and Kion Group
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rev and Kion is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Rev Group and Kion Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kion Group AG and Rev 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 Rev Group are associated (or correlated) with Kion Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kion Group AG has no effect on the direction of Rev i.e., Rev and Kion Group go up and down completely randomly.
Pair Corralation between Rev and Kion Group
Given the investment horizon of 90 days Rev Group is expected to generate 1.01 times more return on investment than Kion Group. However, Rev is 1.01 times more volatile than Kion Group AG. It trades about 0.07 of its potential returns per unit of risk. Kion Group AG is currently generating about 0.05 per unit of risk. If you would invest 2,696 in Rev Group on September 12, 2024 and sell it today you would earn a total of 264.00 from holding Rev Group or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rev Group vs. Kion Group AG
Performance |
| Timeline |
| Rev Group |
| Kion Group AG |
Rev and Kion Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rev and Kion Group
The main advantage of trading using opposite Rev and Kion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rev position performs unexpectedly, Kion Group 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 Kion Group will offset losses from the drop in Kion Group's long position.The idea behind Rev Group and Kion Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kion Group vs. Rev Group | Kion Group vs. Gencor Industries | Kion Group vs. Alamo Group | Kion Group vs. Wabash National |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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