Correlation Between Pabrai Wagons and Kirr Marbach
Can any of the company-specific risk be diversified away by investing in both Pabrai Wagons and Kirr Marbach 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 Pabrai Wagons and Kirr Marbach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pabrai Wagons Institutional and Kirr Marbach Partners, you can compare the effects of market volatilities on Pabrai Wagons and Kirr Marbach 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 Pabrai Wagons with a short position of Kirr Marbach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pabrai Wagons and Kirr Marbach.
Diversification Opportunities for Pabrai Wagons and Kirr Marbach
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pabrai and Kirr is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pabrai Wagons Institutional and Kirr Marbach Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirr Marbach Partners and Pabrai Wagons 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 Pabrai Wagons Institutional are associated (or correlated) with Kirr Marbach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirr Marbach Partners has no effect on the direction of Pabrai Wagons i.e., Pabrai Wagons and Kirr Marbach go up and down completely randomly.
Pair Corralation between Pabrai Wagons and Kirr Marbach
Assuming the 90 days horizon Pabrai Wagons is expected to generate 1.21 times less return on investment than Kirr Marbach. In addition to that, Pabrai Wagons is 1.23 times more volatile than Kirr Marbach Partners. It trades about 0.04 of its total potential returns per unit of risk. Kirr Marbach Partners is currently generating about 0.06 per unit of volatility. If you would invest 2,463 in Kirr Marbach Partners on October 11, 2024 and sell it today you would earn a total of 838.00 from holding Kirr Marbach Partners or generate 34.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 63.1% |
| Values | Daily Returns |
Pabrai Wagons Institutional vs. Kirr Marbach Partners
Performance |
| Timeline |
| Pabrai Wagons Instit |
| Kirr Marbach Partners |
Pabrai Wagons and Kirr Marbach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pabrai Wagons and Kirr Marbach
The main advantage of trading using opposite Pabrai Wagons and Kirr Marbach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pabrai Wagons position performs unexpectedly, Kirr Marbach 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 Kirr Marbach will offset losses from the drop in Kirr Marbach's long position.| Pabrai Wagons vs. Blackrock All Cap Energy | Pabrai Wagons vs. Adams Natural Resources | Pabrai Wagons vs. Icon Natural Resources | Pabrai Wagons vs. Tortoise Energy Independence |
| Kirr Marbach vs. Touchstone Sands Capital | Kirr Marbach vs. Madison Mid Cap | Kirr Marbach vs. Harbor Mid Cap | Kirr Marbach vs. James Small Cap |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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