Correlation Between UNITED UTILITIES and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both UNITED UTILITIES and KINGBOARD CHEMICAL 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 UNITED UTILITIES and KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED UTILITIES GR and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on UNITED UTILITIES and KINGBOARD CHEMICAL 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 UNITED UTILITIES with a short position of KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED UTILITIES and KINGBOARD CHEMICAL.
Diversification Opportunities for UNITED UTILITIES and KINGBOARD CHEMICAL
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between UNITED and KINGBOARD is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL and UNITED UTILITIES 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 UNITED UTILITIES GR are associated (or correlated) with KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of UNITED UTILITIES i.e., UNITED UTILITIES and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between UNITED UTILITIES and KINGBOARD CHEMICAL
Assuming the 90 days trading horizon UNITED UTILITIES GR is expected to generate 0.67 times more return on investment than KINGBOARD CHEMICAL. However, UNITED UTILITIES GR is 1.5 times less risky than KINGBOARD CHEMICAL. It trades about 0.37 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about 0.01 per unit of risk. If you would invest 1,204 in UNITED UTILITIES GR on September 3, 2024 and sell it today you would earn a total of 136.00 from holding UNITED UTILITIES GR or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED UTILITIES GR vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| UNITED UTILITIES |
| KINGBOARD CHEMICAL |
UNITED UTILITIES and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED UTILITIES and KINGBOARD CHEMICAL
The main advantage of trading using opposite UNITED UTILITIES and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| UNITED UTILITIES vs. ANTA SPORTS PRODUCT | UNITED UTILITIES vs. Transport International Holdings | UNITED UTILITIES vs. Sqs Software Quality | UNITED UTILITIES vs. PSI Software AG |
| KINGBOARD CHEMICAL vs. TOTAL GABON | KINGBOARD CHEMICAL vs. Walgreens Boots Alliance | KINGBOARD CHEMICAL vs. Peak Resources Limited |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Directory Find actively traded commodities issued by global exchanges |