Correlation Between Park Electrochemical and Kaman

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

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

Diversification Opportunities for Park Electrochemical and Kaman

0.0

Correlation Coefficient

Park Electrochemical  Kaman

Pay attention - limited upside

The 3 months correlation between Park and Kaman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Park Electrochemical and Kaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaman and Park Electrochemical 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 Park Electrochemical 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 Park Electrochemical i.e., Park Electrochemical and Kaman go up and down completely randomly.

Pair Corralation between Park Electrochemical and Kaman

If you would invest (100.00) in Kaman on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Kaman or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Park Electrochemical  vs.  Kaman

Park Electrochemical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Park Electrochemical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward-looking signals, Park Electrochemical is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kaman

Risk-Adjusted Performance

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 Park Electrochemical and Kaman

The main advantage of trading using opposite Park Electrochemical and Kaman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Electrochemical 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 Park Electrochemical 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.