Correlation Between A1TM34 and KMBB34
Can any of the company-specific risk be diversified away by investing in both A1TM34 and KMBB34 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 A1TM34 and KMBB34 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A1TM34 and KMBB34, you can compare the effects of market volatilities on A1TM34 and KMBB34 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 A1TM34 with a short position of KMBB34. Check out your portfolio center. Please also check ongoing floating volatility patterns of A1TM34 and KMBB34.
Diversification Opportunities for A1TM34 and KMBB34
Poor diversification
The 3 months correlation between A1TM34 and KMBB34 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding A1TM34 and KMBB34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMBB34 and A1TM34 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 A1TM34 are associated (or correlated) with KMBB34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMBB34 has no effect on the direction of A1TM34 i.e., A1TM34 and KMBB34 go up and down completely randomly.
Pair Corralation between A1TM34 and KMBB34
Assuming the 90 days trading horizon A1TM34 is expected to generate 0.59 times more return on investment than KMBB34. However, A1TM34 is 1.71 times less risky than KMBB34. It trades about 0.33 of its potential returns per unit of risk. KMBB34 is currently generating about 0.15 per unit of risk. If you would invest 41,106 in A1TM34 on September 23, 2024 and sell it today you would earn a total of 1,482 from holding A1TM34 or generate 3.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
A1TM34 vs. KMBB34
Performance |
Timeline |
A1TM34 |
KMBB34 |
A1TM34 and KMBB34 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with A1TM34 and KMBB34
The main advantage of trading using opposite A1TM34 and KMBB34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A1TM34 position performs unexpectedly, KMBB34 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 KMBB34 will offset losses from the drop in KMBB34's long position.A1TM34 vs. Taiwan Semiconductor Manufacturing | A1TM34 vs. Apple Inc | A1TM34 vs. Alibaba Group Holding | A1TM34 vs. Microsoft |
KMBB34 vs. Southwest Airlines Co | KMBB34 vs. Global X Funds | KMBB34 vs. Automatic Data Processing | KMBB34 vs. Nordon Indstrias Metalrgicas |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |