Correlation Between KOWORLD AG and CRAWFORD A

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

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

Diversification Opportunities for KOWORLD AG and CRAWFORD A

-0.05

Correlation Coefficient

KOWORLD AG  CRAWFORD A

Good diversification

The 3 months correlation between KOWORLD and CRAWFORD is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding KOWORLD AG and CRAWFORD A NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRAWFORD A NV and KOWORLD AG 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 KOWORLD AG are associated (or correlated) with CRAWFORD A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRAWFORD A NV has no effect on the direction of KOWORLD AG i.e., KOWORLD AG and CRAWFORD A go up and down completely randomly.

Pair Corralation between KOWORLD AG and CRAWFORD A

Assuming the 90 days trading horizon KOWORLD AG is expected to generate 4.82 times less return on investment than CRAWFORD A. But when comparing it to its historical volatility, KOWORLD AG is 1.37 times less risky than CRAWFORD A. It trades about 0.0 of its potential returns per unit of risk. CRAWFORD A NV is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,136  in CRAWFORD A NV on September 27, 2024 and sell it today you would lose (76.00) from holding CRAWFORD A NV or give up 6.69% of portfolio value over 90 days.

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

KOWORLD AG  vs.  CRAWFORD A NV

KOWORLD AG

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days KOWORLD AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KOWORLD AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CRAWFORD A NV

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CRAWFORD A NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, CRAWFORD A reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KOWORLD AG and CRAWFORD A

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

The idea behind KOWORLD AG and CRAWFORD A NV 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.