Correlation Between Vossloh AG and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Vossloh AG 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 Vossloh AG and KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vossloh AG and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on Vossloh AG 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 Vossloh AG with a short position of KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vossloh AG and KINGBOARD CHEMICAL.
Diversification Opportunities for Vossloh AG and KINGBOARD CHEMICAL
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vossloh and KINGBOARD is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Vossloh AG and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL and Vossloh AG 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 Vossloh AG 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 Vossloh AG i.e., Vossloh AG and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between Vossloh AG and KINGBOARD CHEMICAL
Assuming the 90 days trading horizon Vossloh AG is expected to under-perform the KINGBOARD CHEMICAL. But the stock apears to be less risky and, when comparing its historical volatility, Vossloh AG is 2.08 times less risky than KINGBOARD CHEMICAL. The stock trades about -0.04 of its potential returns per unit of risk. The KINGBOARD CHEMICAL is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 203.00 in KINGBOARD CHEMICAL on September 14, 2024 and sell it today you would lose (5.00) from holding KINGBOARD CHEMICAL or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vossloh AG vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| Vossloh AG |
| KINGBOARD CHEMICAL |
Vossloh AG and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vossloh AG and KINGBOARD CHEMICAL
The main advantage of trading using opposite Vossloh AG and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vossloh AG 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.| Vossloh AG vs. KINGBOARD CHEMICAL | Vossloh AG vs. Quaker Chemical | Vossloh AG vs. China BlueChemical | Vossloh AG vs. Sekisui Chemical Co |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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