Correlation Between Kaufman Et and Entech SE

Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Entech SE 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 Kaufman Et and Entech SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kaufman Et Broad and Entech SE SAS, you can compare the effects of market volatilities on Kaufman Et and Entech SE 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 Kaufman Et with a short position of Entech SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Entech SE.

Diversification Opportunities for Kaufman Et and Entech SE

0.11

Correlation Coefficient

Kaufman Et  Entech SE

Average diversification

The 3 months correlation between Kaufman and Entech is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Entech SE SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entech SE SAS and Kaufman Et 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 Kaufman Et Broad are associated (or correlated) with Entech SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entech SE SAS has no effect on the direction of Kaufman Et i.e., Kaufman Et and Entech SE go up and down completely randomly.

Pair Corralation between Kaufman Et and Entech SE

Assuming the 90 days trading horizon Kaufman Et Broad is expected to under-perform the Entech SE. But the stock apears to be less risky and, when comparing its historical volatility, Kaufman Et Broad is 3.46 times less risky than Entech SE. The stock trades about -0.16 of its potential returns per unit of risk. The Entech SE SAS is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Entech SE SAS on September 15, 2024 and sell it today you would earn a total of  94.00  from holding Entech SE SAS or generate 17.74% return on investment over 90 days.

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

Kaufman Et Broad  vs.  Entech SE SAS

Kaufman Et Broad

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaufman Et Broad are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Kaufman Et is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Entech SE SAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Entech SE SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Entech SE is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kaufman Et and Entech SE

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

The idea behind Kaufman Et Broad and Entech SE SAS 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.