Correlation Between Killbuck Bancshares and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Killbuck Bancshares and BBB Foods 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 Killbuck Bancshares and BBB Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Killbuck Bancshares and BBB Foods, you can compare the effects of market volatilities on Killbuck Bancshares and BBB Foods 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 Killbuck Bancshares with a short position of BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Killbuck Bancshares and BBB Foods.
Diversification Opportunities for Killbuck Bancshares and BBB Foods
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Killbuck and BBB is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Killbuck Bancshares and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods and Killbuck Bancshares 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 Killbuck Bancshares are associated (or correlated) with BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Killbuck Bancshares i.e., Killbuck Bancshares and BBB Foods go up and down completely randomly.
Pair Corralation between Killbuck Bancshares and BBB Foods
Given the investment horizon of 90 days Killbuck Bancshares is expected to generate 3.21 times more return on investment than BBB Foods. However, Killbuck Bancshares is 3.21 times more volatile than BBB Foods. It trades about 0.07 of its potential returns per unit of risk. BBB Foods is currently generating about -0.05 per unit of risk. If you would invest 10,800 in Killbuck Bancshares on December 27, 2024 and sell it today you would earn a total of 1,702 from holding Killbuck Bancshares or generate 15.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Killbuck Bancshares vs. BBB Foods
Performance |
Timeline |
Killbuck Bancshares |
BBB Foods |
Killbuck Bancshares and BBB Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Killbuck Bancshares and BBB Foods
The main advantage of trading using opposite Killbuck Bancshares and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Killbuck Bancshares position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.Killbuck Bancshares vs. El Al Israel | Killbuck Bancshares vs. Global Crossing Airlines | Killbuck Bancshares vs. Singapore Airlines | Killbuck Bancshares vs. Nok Airlines Public |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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