Correlation Between KFT and International Business
Can any of the company-specific risk be diversified away by investing in both KFT and International Business 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 KFT and International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KFT and International Business Machines, you can compare the effects of market volatilities on KFT and International Business 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 KFT with a short position of International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of KFT and International Business.
Diversification Opportunities for KFT and International Business
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KFT and International is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KFT and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business and KFT 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 KFT are associated (or correlated) with International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of KFT i.e., KFT and International Business go up and down completely randomly.
Pair Corralation between KFT and International Business
If you would invest (100.00) in KFT on January 20, 2024 and sell it today you would earn a total of 100.00 from holding KFT or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
KFT vs. International Business Machine
Performance |
| Timeline |
| KFT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| International Business |
KFT and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KFT and International Business
The main advantage of trading using opposite KFT and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KFT position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.The idea behind KFT and International Business Machines 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.| International Business vs. Information Services Group | International Business vs. Home Bancorp | International Business vs. CRA International | International Business vs. Aquagold International |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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