Correlation Between National Storm and Kewaunee Scientific
Can any of the company-specific risk be diversified away by investing in both National Storm and Kewaunee Scientific 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 National Storm and Kewaunee Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Storm Recovery and Kewaunee Scientific, you can compare the effects of market volatilities on National Storm and Kewaunee Scientific 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 National Storm with a short position of Kewaunee Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storm and Kewaunee Scientific.
Diversification Opportunities for National Storm and Kewaunee Scientific
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Kewaunee is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding National Storm Recovery and Kewaunee Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewaunee Scientific and National Storm 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 National Storm Recovery are associated (or correlated) with Kewaunee Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewaunee Scientific has no effect on the direction of National Storm i.e., National Storm and Kewaunee Scientific go up and down completely randomly.
Pair Corralation between National Storm and Kewaunee Scientific
Given the investment horizon of 90 days National Storm Recovery is expected to under-perform the Kewaunee Scientific. In addition to that, National Storm is 1.85 times more volatile than Kewaunee Scientific. It trades about -0.34 of its total potential returns per unit of risk. Kewaunee Scientific is currently generating about 0.28 per unit of volatility. If you would invest 3,230 in Kewaunee Scientific on August 29, 2024 and sell it today you would earn a total of 981.00 from holding Kewaunee Scientific or generate 30.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storm Recovery vs. Kewaunee Scientific
Performance |
| Timeline |
| National Storm Recovery |
| Kewaunee Scientific |
National Storm and Kewaunee Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storm and Kewaunee Scientific
The main advantage of trading using opposite National Storm and Kewaunee Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storm position performs unexpectedly, Kewaunee Scientific 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 Kewaunee Scientific will offset losses from the drop in Kewaunee Scientific's long position.| National Storm vs. Interfor | National Storm vs. Western Forest Products | National Storm vs. Stella Jones | National Storm vs. Simpson Manufacturing |
| Kewaunee Scientific vs. Hamilton Beach Brands | Kewaunee Scientific vs. Mohawk Industries | Kewaunee Scientific vs. Whirlpool | Kewaunee Scientific vs. iRobot |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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