Correlation Between Leo Global and K W

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

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

Diversification Opportunities for Leo Global and K W

0.76

Correlation Coefficient

Leo Global  K W

Poor diversification

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

Pair Corralation between Leo Global and K W

Assuming the 90 days trading horizon Leo Global Logistics is expected to under-perform the K W. But the stock apears to be less risky and, when comparing its historical volatility, Leo Global Logistics is 19.53 times less risky than K W. The stock trades about -0.11 of its potential returns per unit of risk. The K W Metal is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  242.00  in K W Metal on October 5, 2024 and sell it today you would lose (122.00) from holding K W Metal or give up 50.41% of portfolio value over 90 days.

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

Leo Global Logistics  vs.  K W Metal

Leo Global Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leo Global Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

K W Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K W Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's primary indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Leo Global and K W

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

The idea behind Leo Global Logistics and K W Metal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.