Correlation Between QUEEN S and Kaufman Broad

Can any of the company-specific risk be diversified away by investing in both QUEEN S and Kaufman Broad 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 QUEEN S and Kaufman Broad into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between QUEEN S ROAD and Kaufman Broad SA, you can compare the effects of market volatilities on QUEEN S and Kaufman Broad 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 QUEEN S with a short position of Kaufman Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of QUEEN S and Kaufman Broad.

Diversification Opportunities for QUEEN S and Kaufman Broad

-0.1

Correlation Coefficient

QUEEN S  Kaufman Broad

Good diversification

The 3 months correlation between QUEEN and Kaufman is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad SA and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with Kaufman Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of QUEEN S i.e., QUEEN S and Kaufman Broad go up and down completely randomly.

Pair Corralation between QUEEN S and Kaufman Broad

Assuming the 90 days horizon QUEEN S ROAD is expected to under-perform the Kaufman Broad. In addition to that, QUEEN S is 1.21 times more volatile than Kaufman Broad SA. It trades about -0.15 of its total potential returns per unit of risk. Kaufman Broad SA is currently generating about 0.0 per unit of volatility. If you would invest  3,200  in Kaufman Broad SA on December 29, 2024 and sell it today you would lose (35.00) from holding Kaufman Broad SA or give up 1.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

QUEEN S ROAD  vs.  Kaufman Broad SA

QUEEN S ROAD

Risk-Adjusted Performance

Very Weak

Over the last 90 days QUEEN S ROAD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Kaufman Broad SA

Risk-Adjusted Performance

Weak

Over the last 90 days Kaufman Broad SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kaufman Broad is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with QUEEN S and Kaufman Broad

The main advantage of trading using opposite QUEEN S and Kaufman Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QUEEN S position performs unexpectedly, Kaufman Broad 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 Kaufman Broad will offset losses from the drop in Kaufman Broad's long position.

The idea behind QUEEN S ROAD and Kaufman Broad SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.