Correlation Between CHEMICAL INDUSTRIES and KAR Auction
Can any of the company-specific risk be diversified away by investing in both CHEMICAL INDUSTRIES and KAR Auction 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 CHEMICAL INDUSTRIES and KAR Auction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEMICAL INDUSTRIES and KAR Auction Services, you can compare the effects of market volatilities on CHEMICAL INDUSTRIES and KAR Auction 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 CHEMICAL INDUSTRIES with a short position of KAR Auction. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMICAL INDUSTRIES and KAR Auction.
Diversification Opportunities for CHEMICAL INDUSTRIES and KAR Auction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHEMICAL and KAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHEMICAL INDUSTRIES and KAR Auction Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAR Auction Services and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES are associated (or correlated) with KAR Auction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAR Auction Services has no effect on the direction of CHEMICAL INDUSTRIES i.e., CHEMICAL INDUSTRIES and KAR Auction go up and down completely randomly.
Pair Corralation between CHEMICAL INDUSTRIES and KAR Auction
If you would invest 1,870 in KAR Auction Services on September 19, 2024 and sell it today you would earn a total of 90.00 from holding KAR Auction Services or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHEMICAL INDUSTRIES vs. KAR Auction Services
Performance |
| Timeline |
| CHEMICAL INDUSTRIES |
| KAR Auction Services |
CHEMICAL INDUSTRIES and KAR Auction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEMICAL INDUSTRIES and KAR Auction
The main advantage of trading using opposite CHEMICAL INDUSTRIES and KAR Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMICAL INDUSTRIES position performs unexpectedly, KAR Auction 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 KAR Auction will offset losses from the drop in KAR Auction's long position.| CHEMICAL INDUSTRIES vs. Gladstone Investment | CHEMICAL INDUSTRIES vs. CITIC Telecom International | CHEMICAL INDUSTRIES vs. COMBA TELECOM SYST | CHEMICAL INDUSTRIES vs. PennyMac Mortgage Investment |
| KAR Auction vs. Webster Financial | KAR Auction vs. National Bank Holdings | KAR Auction vs. Nissan Chemical Corp | KAR Auction vs. CHEMICAL 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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