Correlation Between K Bro and K Bro

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

By analyzing existing cross correlation between K Bro Linen and K Bro Linen, you can compare the effects of market volatilities on K Bro and K Bro 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 K Bro with a short position of K Bro. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Bro and K Bro.

Diversification Opportunities for K Bro and K Bro

0.22

Correlation Coefficient

K Bro  K Bro

Modest diversification

The 3 months correlation between KBRLF and KBL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen and K Bro 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 K Bro Linen are associated (or correlated) with K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of K Bro i.e., K Bro and K Bro go up and down completely randomly.

Pair Corralation between K Bro and K Bro

Assuming the 90 days horizon K Bro Linen is expected to generate 0.57 times more return on investment than K Bro. However, K Bro Linen is 1.75 times less risky than K Bro. It trades about -0.05 of its potential returns per unit of risk. K Bro Linen is currently generating about -0.04 per unit of risk. If you would invest  2,535  in K Bro Linen on May 4, 2025 and sell it today you would lose (31.00) from holding K Bro Linen or give up 1.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	62.5%
Values	Daily Returns

K Bro Linen  vs.  K Bro Linen

K Bro Linen

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, K Bro is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

K Bro Linen

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, K Bro is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with K Bro and K Bro

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

The idea behind K Bro Linen and K Bro Linen 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.