Correlation Between KUKA Aktiengesellscha and Regal Beloit

Can any of the company-specific risk be diversified away by investing in both KUKA Aktiengesellscha and Regal Beloit 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 KUKA Aktiengesellscha and Regal Beloit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KUKA Aktiengesellschaft and Regal Beloit, you can compare the effects of market volatilities on KUKA Aktiengesellscha and Regal Beloit 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 KUKA Aktiengesellscha with a short position of Regal Beloit. Check out your portfolio center. Please also check ongoing floating volatility patterns of KUKA Aktiengesellscha and Regal Beloit.

Diversification Opportunities for KUKA Aktiengesellscha and Regal Beloit

0.0

Correlation Coefficient

KUKA Aktiengesellscha  Regal Beloit

Pay attention - limited upside

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

Pair Corralation between KUKA Aktiengesellscha and Regal Beloit

If you would invest  15,641  in Regal Beloit on August 31, 2024 and sell it today you would earn a total of  1,325  from holding Regal Beloit or generate 8.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

KUKA Aktiengesellschaft  vs.  Regal Beloit

KUKA Aktiengesellschaft

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KUKA Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KUKA Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Regal Beloit

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Beloit are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Regal Beloit may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with KUKA Aktiengesellscha and Regal Beloit

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

The idea behind KUKA Aktiengesellschaft and Regal Beloit 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.