Correlation Between Kinatico and Brambles

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

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

Diversification Opportunities for Kinatico and Brambles

0.42

Correlation Coefficient

Kinatico  Brambles

Very weak diversification

The 3 months correlation between Kinatico and Brambles is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kinatico and Brambles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brambles and Kinatico 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 Kinatico are associated (or correlated) with Brambles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brambles has no effect on the direction of Kinatico i.e., Kinatico and Brambles go up and down completely randomly.

Pair Corralation between Kinatico and Brambles

If you would invest  1,485  in Brambles on October 4, 2024 and sell it today you would earn a total of  457.00  from holding Brambles or generate 30.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.3%
Values	Daily Returns

Kinatico  vs.  Brambles

Kinatico

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Kinatico has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Kinatico unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brambles

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brambles are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Brambles is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kinatico and Brambles

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

The idea behind Kinatico and Brambles 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.