Correlation Between Superior Uniform and Kontoor Brands
Can any of the company-specific risk be diversified away by investing in both Superior Uniform and Kontoor Brands 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 Superior Uniform and Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Uniform Group and Kontoor Brands, you can compare the effects of market volatilities on Superior Uniform and Kontoor Brands 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 Superior Uniform with a short position of Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Uniform and Kontoor Brands.
Diversification Opportunities for Superior Uniform and Kontoor Brands
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Superior and Kontoor is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Superior Uniform Group and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands and Superior Uniform 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 Superior Uniform Group are associated (or correlated) with Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of Superior Uniform i.e., Superior Uniform and Kontoor Brands go up and down completely randomly.
Pair Corralation between Superior Uniform and Kontoor Brands
Considering the 90-day investment horizon Superior Uniform is expected to generate 1.56 times less return on investment than Kontoor Brands. But when comparing it to its historical volatility, Superior Uniform Group is 1.14 times less risky than Kontoor Brands. It trades about 0.21 of its potential returns per unit of risk. Kontoor Brands is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 7,757 in Kontoor Brands on August 28, 2024 and sell it today you would earn a total of 1,619 from holding Kontoor Brands or generate 20.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Uniform Group vs. Kontoor Brands
Performance |
| Timeline |
| Superior Uniform |
| Kontoor Brands |
Superior Uniform and Kontoor Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Uniform and Kontoor Brands
The main advantage of trading using opposite Superior Uniform and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Uniform position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.| Superior Uniform vs. Lakeland Industries | Superior Uniform vs. Jerash Holdings | Superior Uniform vs. G III Apparel Group | Superior Uniform vs. JX Luxventure Limited |
| Kontoor Brands vs. VF Corporation | Kontoor Brands vs. Levi Strauss Co | Kontoor Brands vs. Under Armour A | Kontoor Brands vs. Oxford Industries |
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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