Correlation Between Kemper and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Kemper and AIR PRODCHEMICALS 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 Kemper and AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemper and AIR PRODCHEMICALS, you can compare the effects of market volatilities on Kemper and AIR PRODCHEMICALS 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 Kemper with a short position of AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemper and AIR PRODCHEMICALS.
Diversification Opportunities for Kemper and AIR PRODCHEMICALS
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kemper and AIR is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kemper and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS and Kemper 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 Kemper are associated (or correlated) with AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Kemper i.e., Kemper and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Kemper and AIR PRODCHEMICALS
Assuming the 90 days horizon Kemper is expected to generate 1.32 times less return on investment than AIR PRODCHEMICALS. In addition to that, Kemper is 1.42 times more volatile than AIR PRODCHEMICALS. It trades about 0.08 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.16 per unit of volatility. If you would invest 25,170 in AIR PRODCHEMICALS on November 3, 2024 and sell it today you would earn a total of 7,220 from holding AIR PRODCHEMICALS or generate 28.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kemper vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| Kemper |
| AIR PRODCHEMICALS |
Kemper and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemper and AIR PRODCHEMICALS
The main advantage of trading using opposite Kemper and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemper position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Kemper vs. BORR DRILLING NEW | Kemper vs. United Breweries Co | Kemper vs. IMAGIN MEDICAL INC | Kemper vs. Suntory Beverage Food |
| AIR PRODCHEMICALS vs. SPORTING | AIR PRODCHEMICALS vs. SOEDER SPORTFISKE AB | AIR PRODCHEMICALS vs. China Resources Beer | AIR PRODCHEMICALS vs. Suntory Beverage Food |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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