Correlation Between Shimmick Common and KBR
Can any of the company-specific risk be diversified away by investing in both Shimmick Common and KBR 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 Shimmick Common and KBR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimmick Common and KBR Inc, you can compare the effects of market volatilities on Shimmick Common and KBR 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 Shimmick Common with a short position of KBR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimmick Common and KBR.
Diversification Opportunities for Shimmick Common and KBR
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shimmick and KBR is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shimmick Common and KBR Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBR Inc and Shimmick Common 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 Shimmick Common are associated (or correlated) with KBR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBR Inc has no effect on the direction of Shimmick Common i.e., Shimmick Common and KBR go up and down completely randomly.
Pair Corralation between Shimmick Common and KBR
Given the investment horizon of 90 days Shimmick Common is expected to generate 2.32 times less return on investment than KBR. In addition to that, Shimmick Common is 5.43 times more volatile than KBR Inc. It trades about 0.0 of its total potential returns per unit of risk. KBR Inc is currently generating about 0.03 per unit of volatility. If you would invest 5,101 in KBR Inc on September 12, 2024 and sell it today you would earn a total of 832.50 from holding KBR Inc or generate 16.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.75% |
| Values | Daily Returns |
Shimmick Common vs. KBR Inc
Performance |
| Timeline |
| Shimmick Common |
| KBR Inc |
Shimmick Common and KBR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimmick Common and KBR
The main advantage of trading using opposite Shimmick Common and KBR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimmick Common position performs unexpectedly, KBR 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 KBR will offset losses from the drop in KBR's long position.| Shimmick Common vs. KBR Inc | Shimmick Common vs. Tetra Tech | Shimmick Common vs. Fluor | Shimmick Common vs. Topbuild Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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