Correlation Between HALSTEAD JAMES and Kingspan Group

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

By analyzing existing cross correlation between HALSTEAD JAMES LS 05 and Kingspan Group plc, you can compare the effects of market volatilities on HALSTEAD JAMES and Kingspan Group 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 HALSTEAD JAMES with a short position of Kingspan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HALSTEAD JAMES and Kingspan Group.

Diversification Opportunities for HALSTEAD JAMES and Kingspan Group

-0.69

Correlation Coefficient

HALSTEAD JAMES  Kingspan Group

Excellent diversification

The 3 months correlation between HALSTEAD and Kingspan is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding HALSTEAD JAMES LS 05 and Kingspan Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingspan Group plc and HALSTEAD JAMES 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 HALSTEAD JAMES LS 05 are associated (or correlated) with Kingspan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingspan Group plc has no effect on the direction of HALSTEAD JAMES i.e., HALSTEAD JAMES and Kingspan Group go up and down completely randomly.

Pair Corralation between HALSTEAD JAMES and Kingspan Group

Assuming the 90 days trading horizon HALSTEAD JAMES LS 05 is expected to generate 1.46 times more return on investment than Kingspan Group. However, HALSTEAD JAMES is 1.46 times more volatile than Kingspan Group plc. It trades about 0.09 of its potential returns per unit of risk. Kingspan Group plc is currently generating about -0.16 per unit of risk. If you would invest  184.00  in HALSTEAD JAMES LS 05 on September 22, 2024 and sell it today you would earn a total of  24.00  from holding HALSTEAD JAMES LS 05 or generate 13.04% return on investment over 90 days.

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

HALSTEAD JAMES LS 05  vs.  Kingspan Group plc

HALSTEAD JAMES LS

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HALSTEAD JAMES LS 05 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, HALSTEAD JAMES reported solid returns over the last few months and may actually be approaching a breakup point.

Kingspan Group plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingspan Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with HALSTEAD JAMES and Kingspan Group

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

The idea behind HALSTEAD JAMES LS 05 and Kingspan Group plc 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.