Correlation Between Kenon Holdings and 26443TAB2

Can any of the company-specific risk be diversified away by investing in both Kenon Holdings and 26443TAB2 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 Kenon Holdings and 26443TAB2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kenon Holdings and US26443TAB26, you can compare the effects of market volatilities on Kenon Holdings and 26443TAB2 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 Kenon Holdings with a short position of 26443TAB2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and 26443TAB2.

Diversification Opportunities for Kenon Holdings and 26443TAB2

-0.38

Correlation Coefficient

Kenon Holdings  26443TAB2

Very good diversification

The 3 months correlation between Kenon and 26443TAB2 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and US26443TAB26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US26443TAB26 and Kenon Holdings 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 Kenon Holdings are associated (or correlated) with 26443TAB2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US26443TAB26 has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and 26443TAB2 go up and down completely randomly.

Pair Corralation between Kenon Holdings and 26443TAB2

Considering the 90-day investment horizon Kenon Holdings is expected to generate 2.36 times more return on investment than 26443TAB2. However, Kenon Holdings is 2.36 times more volatile than US26443TAB26. It trades about 0.0 of its potential returns per unit of risk. US26443TAB26 is currently generating about -0.14 per unit of risk. If you would invest  3,215  in Kenon Holdings on October 26, 2024 and sell it today you would lose (14.00) from holding Kenon Holdings or give up 0.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.16%
Values	Daily Returns

Kenon Holdings  vs.  US26443TAB26

Kenon Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Kenon Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

US26443TAB26

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US26443TAB26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US26443TAB26 investors.

Pair Trading with Kenon Holdings and 26443TAB2

The main advantage of trading using opposite Kenon Holdings and 26443TAB2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings position performs unexpectedly, 26443TAB2 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 26443TAB2 will offset losses from the drop in 26443TAB2's long position.

The idea behind Kenon Holdings and US26443TAB26 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.