Correlation Between KENEDIX OFFICE and COMMERCIAL VEHICLE

Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and COMMERCIAL VEHICLE 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 KENEDIX OFFICE and COMMERCIAL VEHICLE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KENEDIX OFFICE INV and COMMERCIAL VEHICLE, you can compare the effects of market volatilities on KENEDIX OFFICE and COMMERCIAL VEHICLE 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 KENEDIX OFFICE with a short position of COMMERCIAL VEHICLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and COMMERCIAL VEHICLE.

Diversification Opportunities for KENEDIX OFFICE and COMMERCIAL VEHICLE

0.64

Correlation Coefficient

KENEDIX OFFICE  COMMERCIAL VEHICLE

Poor diversification

The 3 months correlation between KENEDIX and COMMERCIAL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and COMMERCIAL VEHICLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL VEHICLE and KENEDIX OFFICE 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 KENEDIX OFFICE INV are associated (or correlated) with COMMERCIAL VEHICLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL VEHICLE has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and COMMERCIAL VEHICLE go up and down completely randomly.

Pair Corralation between KENEDIX OFFICE and COMMERCIAL VEHICLE

Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.28 times more return on investment than COMMERCIAL VEHICLE. However, KENEDIX OFFICE INV is 3.61 times less risky than COMMERCIAL VEHICLE. It trades about -0.06 of its potential returns per unit of risk. COMMERCIAL VEHICLE is currently generating about -0.08 per unit of risk. If you would invest  96,000  in KENEDIX OFFICE INV on September 4, 2024 and sell it today you would lose (5,000) from holding KENEDIX OFFICE INV or give up 5.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

KENEDIX OFFICE INV  vs.  COMMERCIAL VEHICLE

KENEDIX OFFICE INV

Risk-Adjusted Performance

0 of 100

Very Weak

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

COMMERCIAL VEHICLE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COMMERCIAL VEHICLE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with KENEDIX OFFICE and COMMERCIAL VEHICLE

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

The idea behind KENEDIX OFFICE INV and COMMERCIAL VEHICLE 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.