Correlation Between KENEDIX OFFICE and HMS Bergbau

Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE and HMS Bergbau 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 HMS Bergbau 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 HMS Bergbau AG, you can compare the effects of market volatilities on KENEDIX OFFICE and HMS Bergbau 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 HMS Bergbau. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and HMS Bergbau.

Diversification Opportunities for KENEDIX OFFICE and HMS Bergbau

-0.14

Correlation Coefficient

KENEDIX OFFICE  HMS Bergbau

Good diversification

The 3 months correlation between KENEDIX and HMS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and HMS Bergbau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Bergbau AG 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 HMS Bergbau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Bergbau AG has no effect on the direction of KENEDIX OFFICE i.e., KENEDIX OFFICE and HMS Bergbau go up and down completely randomly.

Pair Corralation between KENEDIX OFFICE and HMS Bergbau

Assuming the 90 days horizon KENEDIX OFFICE is expected to generate 1.39 times less return on investment than HMS Bergbau. In addition to that, KENEDIX OFFICE is 2.42 times more volatile than HMS Bergbau AG. It trades about 0.07 of its total potential returns per unit of risk. HMS Bergbau AG is currently generating about 0.22 per unit of volatility. If you would invest  2,800  in HMS Bergbau AG on October 9, 2024 and sell it today you would earn a total of  180.00  from holding HMS Bergbau AG or generate 6.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KENEDIX OFFICE INV  vs.  HMS Bergbau AG

KENEDIX OFFICE INV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KENEDIX OFFICE INV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

HMS Bergbau AG

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HMS Bergbau AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, HMS Bergbau is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with KENEDIX OFFICE and HMS Bergbau

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

The idea behind KENEDIX OFFICE INV and HMS Bergbau AG 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.