Correlation Between Kendrion and IShares MSCI

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

By analyzing existing cross correlation between Kendrion NV and iShares MSCI USA, you can compare the effects of market volatilities on Kendrion and IShares MSCI 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 Kendrion with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kendrion and IShares MSCI.

Diversification Opportunities for Kendrion and IShares MSCI

-0.73

Correlation Coefficient

Kendrion  IShares MSCI

Pay attention - limited upside

The 3 months correlation between Kendrion and IShares is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kendrion NV and iShares MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI USA and Kendrion 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 Kendrion NV are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI USA has no effect on the direction of Kendrion i.e., Kendrion and IShares MSCI go up and down completely randomly.

Pair Corralation between Kendrion and IShares MSCI

Assuming the 90 days trading horizon Kendrion NV is expected to under-perform the IShares MSCI. In addition to that, Kendrion is 2.41 times more volatile than iShares MSCI USA. It trades about -0.18 of its total potential returns per unit of risk. iShares MSCI USA is currently generating about 0.1 per unit of volatility. If you would invest  1,074  in iShares MSCI USA on September 19, 2024 and sell it today you would earn a total of  45.00  from holding iShares MSCI USA or generate 4.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Kendrion NV  vs.  iShares MSCI USA

Kendrion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kendrion NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

iShares MSCI USA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares MSCI USA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IShares MSCI is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kendrion and IShares MSCI

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

The idea behind Kendrion NV and iShares MSCI USA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.