Correlation Between 743315BA0 and Kontoor Brands

Can any of the company-specific risk be diversified away by investing in both 743315BA0 and Kontoor Brands 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 743315BA0 and Kontoor Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PGR 37 15 MAR 52 and Kontoor Brands, you can compare the effects of market volatilities on 743315BA0 and Kontoor Brands 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 743315BA0 with a short position of Kontoor Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of 743315BA0 and Kontoor Brands.

Diversification Opportunities for 743315BA0 and Kontoor Brands

-0.38

Correlation Coefficient

743315BA0  Kontoor Brands

Very good diversification

The 3 months correlation between 743315BA0 and Kontoor is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PGR 37 15 MAR 52 and Kontoor Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kontoor Brands and 743315BA0 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 PGR 37 15 MAR 52 are associated (or correlated) with Kontoor Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kontoor Brands has no effect on the direction of 743315BA0 i.e., 743315BA0 and Kontoor Brands go up and down completely randomly.

Pair Corralation between 743315BA0 and Kontoor Brands

Assuming the 90 days trading horizon PGR 37 15 MAR 52 is expected to under-perform the Kontoor Brands. But the bond apears to be less risky and, when comparing its historical volatility, PGR 37 15 MAR 52 is 2.04 times less risky than Kontoor Brands. The bond trades about -0.11 of its potential returns per unit of risk. The Kontoor Brands is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  7,287  in Kontoor Brands on September 2, 2024 and sell it today you would earn a total of  1,891  from holding Kontoor Brands or generate 25.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.44%
Values	Daily Returns

PGR 37 15 MAR 52  vs.  Kontoor Brands

PGR 37 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PGR 37 15 MAR 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for PGR 37 15 MAR 52 investors.

Kontoor Brands

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kontoor Brands are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Kontoor Brands sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 743315BA0 and Kontoor Brands

The main advantage of trading using opposite 743315BA0 and Kontoor Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 743315BA0 position performs unexpectedly, Kontoor Brands 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 Kontoor Brands will offset losses from the drop in Kontoor Brands' long position.

The idea behind PGR 37 15 MAR 52 and Kontoor Brands 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.