Correlation Between KINGBOARD CHEMICAL and OFFICE DEPOT

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

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

Diversification Opportunities for KINGBOARD CHEMICAL and OFFICE DEPOT

0.0

Correlation Coefficient

KINGBOARD CHEMICAL  OFFICE DEPOT

Pay attention - limited upside

The 3 months correlation between KINGBOARD and OFFICE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and OFFICE DEPOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICE DEPOT and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL are associated (or correlated) with OFFICE DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICE DEPOT has no effect on the direction of KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and OFFICE DEPOT go up and down completely randomly.

Pair Corralation between KINGBOARD CHEMICAL and OFFICE DEPOT

If you would invest  190.00  in KINGBOARD CHEMICAL on October 10, 2024 and sell it today you would earn a total of  40.00  from holding KINGBOARD CHEMICAL or generate 21.05% return on investment over 90 days.

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

KINGBOARD CHEMICAL  vs.  OFFICE DEPOT

KINGBOARD CHEMICAL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KINGBOARD CHEMICAL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, KINGBOARD CHEMICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

OFFICE DEPOT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OFFICE DEPOT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, OFFICE DEPOT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with KINGBOARD CHEMICAL and OFFICE DEPOT

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

The idea behind KINGBOARD CHEMICAL and OFFICE DEPOT 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.