Correlation Between KOWORLD AG and Steadfast Group
Can any of the company-specific risk be diversified away by investing in both KOWORLD AG and Steadfast Group 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 KOWORLD AG and Steadfast Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KOWORLD AG and Steadfast Group Limited, you can compare the effects of market volatilities on KOWORLD AG and Steadfast Group 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 KOWORLD AG with a short position of Steadfast Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KOWORLD AG and Steadfast Group.
Diversification Opportunities for KOWORLD AG and Steadfast Group
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KOWORLD and Steadfast is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding KOWORLD AG and Steadfast Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steadfast Group and KOWORLD 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 KOWORLD AG are associated (or correlated) with Steadfast Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steadfast Group has no effect on the direction of KOWORLD AG i.e., KOWORLD AG and Steadfast Group go up and down completely randomly.
Pair Corralation between KOWORLD AG and Steadfast Group
Assuming the 90 days trading horizon KOWORLD AG is expected to generate 0.9 times more return on investment than Steadfast Group. However, KOWORLD AG is 1.11 times less risky than Steadfast Group. It trades about -0.04 of its potential returns per unit of risk. Steadfast Group Limited is currently generating about -0.1 per unit of risk. If you would invest 2,890 in KOWORLD AG on November 5, 2024 and sell it today you would lose (40.00) from holding KOWORLD AG or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KOWORLD AG vs. Steadfast Group Limited
Performance |
| Timeline |
| KOWORLD AG |
| Steadfast Group |
KOWORLD AG and Steadfast Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KOWORLD AG and Steadfast Group
The main advantage of trading using opposite KOWORLD AG and Steadfast Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KOWORLD AG position performs unexpectedly, Steadfast Group 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 Steadfast Group will offset losses from the drop in Steadfast Group's long position.| KOWORLD AG vs. TRADELINK ELECTRON | KOWORLD AG vs. National Retail Properties | KOWORLD AG vs. TRADEDOUBLER AB SK | KOWORLD AG vs. Fast Retailing Co |
| Steadfast Group vs. Nucletron Electronic Aktiengesellschaft | Steadfast Group vs. UNITED RENTALS | Steadfast Group vs. ALBIS LEASING AG | Steadfast Group vs. CSSC Offshore Marine |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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