Correlation Between SPX Corp and Kadant

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

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

Diversification Opportunities for SPX Corp and Kadant

-0.08

Correlation Coefficient

SPX Corp  Kadant

Good diversification

The 3 months correlation between SPX and Kadant is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SPX Corp and Kadant Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kadant Inc and SPX Corp 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 SPX Corp are associated (or correlated) with Kadant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kadant Inc has no effect on the direction of SPX Corp i.e., SPX Corp and Kadant go up and down completely randomly.

Pair Corralation between SPX Corp and Kadant

Given the investment horizon of 90 days SPX Corp is expected to generate 0.81 times more return on investment than Kadant. However, SPX Corp is 1.24 times less risky than Kadant. It trades about 0.11 of its potential returns per unit of risk. Kadant Inc is currently generating about -0.02 per unit of risk. If you would invest  16,997  in SPX Corp on July 6, 2025 and sell it today you would earn a total of  1,986  from holding SPX Corp or generate 11.68% return on investment over 90 days.

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

SPX Corp  vs.  Kadant Inc

SPX Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SPX Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, SPX Corp may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Kadant Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Kadant Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Kadant is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SPX Corp and Kadant

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

The idea behind SPX Corp and Kadant Inc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.