Correlation Between Century Global and KP Tissue
Can any of the company-specific risk be diversified away by investing in both Century Global and KP Tissue 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 Century Global and KP Tissue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Global Commodities and KP Tissue, you can compare the effects of market volatilities on Century Global and KP Tissue 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 Century Global with a short position of KP Tissue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Global and KP Tissue.
Diversification Opportunities for Century Global and KP Tissue
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Century and KPT is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Century Global Commodities and KP Tissue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KP Tissue and Century Global 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 Century Global Commodities are associated (or correlated) with KP Tissue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KP Tissue has no effect on the direction of Century Global i.e., Century Global and KP Tissue go up and down completely randomly.
Pair Corralation between Century Global and KP Tissue
Assuming the 90 days trading horizon Century Global Commodities is expected to generate 19.1 times more return on investment than KP Tissue. However, Century Global is 19.1 times more volatile than KP Tissue. It trades about 0.22 of its potential returns per unit of risk. KP Tissue is currently generating about 0.02 per unit of risk. If you would invest 4.00 in Century Global Commodities on August 13, 2025 and sell it today you would earn a total of 2.00 from holding Century Global Commodities or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Global Commodities vs. KP Tissue
Performance |
| Timeline |
| Century Global Commo |
| KP Tissue |
Century Global and KP Tissue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Global and KP Tissue
The main advantage of trading using opposite Century Global and KP Tissue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Global position performs unexpectedly, KP Tissue 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 KP Tissue will offset losses from the drop in KP Tissue's long position.The idea behind Century Global Commodities and KP Tissue 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.| KP Tissue vs. Organto Foods Incorporated | KP Tissue vs. Colabor Group | KP Tissue vs. Pesorama | KP Tissue vs. Swiss Water Decaffeinated |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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