Correlation Between National Presto and Kaman

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

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

Diversification Opportunities for National Presto and Kaman

0.41

Correlation Coefficient

National Presto  Kaman

Very weak diversification

The 3 months correlation between National and Kaman is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding National Presto Industries and Kaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaman and National Presto 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 National Presto Industries are associated (or correlated) with Kaman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaman has no effect on the direction of National Presto i.e., National Presto and Kaman go up and down completely randomly.

Pair Corralation between National Presto and Kaman

If you would invest  7,514  in National Presto Industries on August 30, 2024 and sell it today you would earn a total of  344.00  from holding National Presto Industries or generate 4.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	2.27%
Values	Daily Returns

National Presto Industries  vs.  Kaman

National Presto Indu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Presto Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, National Presto is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Kaman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaman has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Kaman is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with National Presto and Kaman

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

The idea behind National Presto Industries and Kaman 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.

Check out your portfolio center.

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.