Correlation Between Kaufman Broad and THORNEY TECHS
Can any of the company-specific risk be diversified away by investing in both Kaufman Broad and THORNEY TECHS 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 Kaufman Broad and THORNEY TECHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaufman Broad SA and THORNEY TECHS LTD, you can compare the effects of market volatilities on Kaufman Broad and THORNEY TECHS 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 Kaufman Broad with a short position of THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaufman Broad and THORNEY TECHS.
Diversification Opportunities for Kaufman Broad and THORNEY TECHS
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kaufman and THORNEY is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kaufman Broad SA and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD and Kaufman Broad 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 Kaufman Broad SA are associated (or correlated) with THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of Kaufman Broad i.e., Kaufman Broad and THORNEY TECHS go up and down completely randomly.
Pair Corralation between Kaufman Broad and THORNEY TECHS
Assuming the 90 days horizon Kaufman Broad is expected to generate 3.6 times less return on investment than THORNEY TECHS. But when comparing it to its historical volatility, Kaufman Broad SA is 2.5 times less risky than THORNEY TECHS. It trades about 0.03 of its potential returns per unit of risk. THORNEY TECHS LTD is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.85 in THORNEY TECHS LTD on September 26, 2024 and sell it today you would earn a total of 0.30 from holding THORNEY TECHS LTD or generate 4.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kaufman Broad SA vs. THORNEY TECHS LTD
Performance |
Timeline |
Kaufman Broad SA |
THORNEY TECHS LTD |
Kaufman Broad and THORNEY TECHS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kaufman Broad and THORNEY TECHS
The main advantage of trading using opposite Kaufman Broad and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaufman Broad position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS's long position.Kaufman Broad vs. British American Tobacco | Kaufman Broad vs. FUYO GENERAL LEASE | Kaufman Broad vs. MOVIE GAMES SA | Kaufman Broad vs. IMPERIAL TOBACCO |
THORNEY TECHS vs. Shenandoah Telecommunications | THORNEY TECHS vs. MAROC TELECOM | THORNEY TECHS vs. Entravision Communications | THORNEY TECHS vs. Major Drilling Group |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
CEOs Directory Screen CEOs from public companies around the world | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |