Correlation Between Kenon Holdings and 26884ABN2

Can any of the company-specific risk be diversified away by investing in both Kenon Holdings and 26884ABN2 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 26884ABN2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kenon Holdings and EQR 185 01 AUG 31, you can compare the effects of market volatilities on Kenon Holdings and 26884ABN2 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 26884ABN2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and 26884ABN2.

Diversification Opportunities for Kenon Holdings and 26884ABN2

-0.43

Correlation Coefficient

Kenon Holdings  26884ABN2

Very good diversification

The 3 months correlation between Kenon and 26884ABN2 is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and EQR 185 01 AUG 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQR 185 01 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 26884ABN2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQR 185 01 has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and 26884ABN2 go up and down completely randomly.

Pair Corralation between Kenon Holdings and 26884ABN2

Considering the 90-day investment horizon Kenon Holdings is expected to generate 5.09 times more return on investment than 26884ABN2. However, Kenon Holdings is 5.09 times more volatile than EQR 185 01 AUG 31. It trades about 0.03 of its potential returns per unit of risk. EQR 185 01 AUG 31 is currently generating about -0.02 per unit of risk. If you would invest  3,068  in Kenon Holdings on December 4, 2024 and sell it today you would earn a total of  81.00  from holding Kenon Holdings or generate 2.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.61%
Values	Daily Returns

Kenon Holdings  vs.  EQR 185 01 AUG 31

Kenon Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Kenon Holdings is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

EQR 185 01

Risk-Adjusted Performance

Very Weak

Over the last 90 days EQR 185 01 AUG 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26884ABN2 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kenon Holdings and 26884ABN2

The main advantage of trading using opposite Kenon Holdings and 26884ABN2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings position performs unexpectedly, 26884ABN2 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 26884ABN2 will offset losses from the drop in 26884ABN2's long position.

The idea behind Kenon Holdings and EQR 185 01 AUG 31 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.