Correlation Between Kaufman Et and Seche Environnem

Can any of the company-specific risk be diversified away by investing in both Kaufman Et and Seche Environnem 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 Seche Environnem 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 Seche Environnem, you can compare the effects of market volatilities on Kaufman Et and Seche Environnem 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 Seche Environnem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Et and Seche Environnem.

Diversification Opportunities for Kaufman Et and Seche Environnem

0.76

Correlation Coefficient

Kaufman Et  Seche Environnem

Poor diversification

The 3 months correlation between Kaufman and Seche is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Et Broad and Seche Environnem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seche Environnem 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 Seche Environnem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seche Environnem has no effect on the direction of Kaufman Et i.e., Kaufman Et and Seche Environnem go up and down completely randomly.

Pair Corralation between Kaufman Et and Seche Environnem

Assuming the 90 days trading horizon Kaufman Et Broad is expected to under-perform the Seche Environnem. But the stock apears to be less risky and, when comparing its historical volatility, Kaufman Et Broad is 1.45 times less risky than Seche Environnem. The stock trades about -0.1 of its potential returns per unit of risk. The Seche Environnem is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  8,300  in Seche Environnem on October 26, 2024 and sell it today you would lose (620.00) from holding Seche Environnem or give up 7.47% of portfolio value over 90 days.

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

Kaufman Et Broad  vs.  Seche Environnem

Kaufman Et Broad

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaufman Et Broad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Seche Environnem

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Kaufman Et and Seche Environnem

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

The idea behind Kaufman Et Broad and Seche Environnem 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.