Correlation Between Rogers Sugar and KDA
Can any of the company-specific risk be diversified away by investing in both Rogers Sugar and KDA 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 Rogers Sugar and KDA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers Sugar and KDA Group, you can compare the effects of market volatilities on Rogers Sugar and KDA 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 Rogers Sugar with a short position of KDA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Sugar and KDA.
Diversification Opportunities for Rogers Sugar and KDA
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Rogers and KDA is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Sugar and KDA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KDA Group and Rogers Sugar 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 Rogers Sugar are associated (or correlated) with KDA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KDA Group has no effect on the direction of Rogers Sugar i.e., Rogers Sugar and KDA go up and down completely randomly.
Pair Corralation between Rogers Sugar and KDA
Assuming the 90 days trading horizon Rogers Sugar is expected to generate 2.95 times less return on investment than KDA. But when comparing it to its historical volatility, Rogers Sugar is 1.83 times less risky than KDA. It trades about 0.11 of its potential returns per unit of risk. KDA Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 25.00 in KDA Group on September 25, 2024 and sell it today you would earn a total of 3.00 from holding KDA Group or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers Sugar vs. KDA Group
Performance |
| Timeline |
| Rogers Sugar |
| KDA Group |
Rogers Sugar and KDA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers Sugar and KDA
The main advantage of trading using opposite Rogers Sugar and KDA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Sugar position performs unexpectedly, KDA 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 KDA will offset losses from the drop in KDA's long position.| Rogers Sugar vs. Empire Company Limited | Rogers Sugar vs. Premium Brands Holdings | Rogers Sugar vs. Metro Inc |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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