Correlation Between Rocket Lab and Kion Group
Can any of the company-specific risk be diversified away by investing in both Rocket Lab 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 Rocket Lab and Kion Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocket Lab USA and Kion Group AG, you can compare the effects of market volatilities on Rocket Lab 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 Rocket Lab with a short position of Kion Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocket Lab and Kion Group.
Diversification Opportunities for Rocket Lab and Kion Group
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rocket and Kion is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Lab USA 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 Rocket Lab 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 Rocket Lab USA 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 Rocket Lab i.e., Rocket Lab and Kion Group go up and down completely randomly.
Pair Corralation between Rocket Lab and Kion Group
Given the investment horizon of 90 days Rocket Lab USA is expected to generate 1.61 times more return on investment than Kion Group. However, Rocket Lab is 1.61 times more volatile than Kion Group AG. It trades about 0.1 of its potential returns per unit of risk. Kion Group AG is currently generating about 0.02 per unit of risk. If you would invest 412.00 in Rocket Lab USA on September 4, 2024 and sell it today you would earn a total of 2,004 from holding Rocket Lab USA or generate 486.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocket Lab USA vs. Kion Group AG
Performance |
| Timeline |
| Rocket Lab USA |
| Kion Group AG |
Rocket Lab and Kion Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocket Lab and Kion Group
The main advantage of trading using opposite Rocket Lab and Kion Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocket Lab 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.| Rocket Lab vs. Lilium NV | Rocket Lab vs. Archer Aviation | Rocket Lab vs. Eve Holding | Rocket Lab vs. Ehang Holdings |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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