Correlation Between KENNAMETAL INC and TIANDE CHEMICAL
Can any of the company-specific risk be diversified away by investing in both KENNAMETAL INC and TIANDE CHEMICAL 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 KENNAMETAL INC and TIANDE CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENNAMETAL INC and TIANDE CHEMICAL, you can compare the effects of market volatilities on KENNAMETAL INC and TIANDE CHEMICAL 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 KENNAMETAL INC with a short position of TIANDE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENNAMETAL INC and TIANDE CHEMICAL.
Diversification Opportunities for KENNAMETAL INC and TIANDE CHEMICAL
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KENNAMETAL and TIANDE is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding KENNAMETAL INC and TIANDE CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIANDE CHEMICAL and KENNAMETAL INC 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 KENNAMETAL INC are associated (or correlated) with TIANDE CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIANDE CHEMICAL has no effect on the direction of KENNAMETAL INC i.e., KENNAMETAL INC and TIANDE CHEMICAL go up and down completely randomly.
Pair Corralation between KENNAMETAL INC and TIANDE CHEMICAL
If you would invest 7.25 in TIANDE CHEMICAL on September 25, 2024 and sell it today you would earn a total of 0.00 from holding TIANDE CHEMICAL or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KENNAMETAL INC vs. TIANDE CHEMICAL
Performance |
Timeline |
KENNAMETAL INC |
TIANDE CHEMICAL |
KENNAMETAL INC and TIANDE CHEMICAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KENNAMETAL INC and TIANDE CHEMICAL
The main advantage of trading using opposite KENNAMETAL INC and TIANDE CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENNAMETAL INC position performs unexpectedly, TIANDE CHEMICAL 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 TIANDE CHEMICAL will offset losses from the drop in TIANDE CHEMICAL's long position.KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Apple Inc | KENNAMETAL INC vs. Microsoft | KENNAMETAL INC vs. Microsoft |
TIANDE CHEMICAL vs. Apple Inc | TIANDE CHEMICAL vs. Apple Inc | TIANDE CHEMICAL vs. Microsoft | TIANDE CHEMICAL vs. Microsoft |
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 CEOs Directory module to screen CEOs from public companies around the world.
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