Correlation Between Chicago Rivet and Kennametal
Can any of the company-specific risk be diversified away by investing in both Chicago Rivet and Kennametal 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 Chicago Rivet and Kennametal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chicago Rivet Machine and Kennametal, you can compare the effects of market volatilities on Chicago Rivet and Kennametal 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 Chicago Rivet with a short position of Kennametal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Rivet and Kennametal.
Diversification Opportunities for Chicago Rivet and Kennametal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chicago and Kennametal is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Rivet Machine and Kennametal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kennametal and Chicago Rivet 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 Chicago Rivet Machine are associated (or correlated) with Kennametal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kennametal has no effect on the direction of Chicago Rivet i.e., Chicago Rivet and Kennametal go up and down completely randomly.
Pair Corralation between Chicago Rivet and Kennametal
Considering the 90-day investment horizon Chicago Rivet Machine is expected to under-perform the Kennametal. In addition to that, Chicago Rivet is 2.26 times more volatile than Kennametal. It trades about -0.01 of its total potential returns per unit of risk. Kennametal is currently generating about 0.0 per unit of volatility. If you would invest 2,227 in Kennametal on March 22, 2025 and sell it today you would lose (41.00) from holding Kennametal or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chicago Rivet Machine vs. Kennametal
Performance |
| Timeline |
| Chicago Rivet Machine |
| Kennametal |
Chicago Rivet and Kennametal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chicago Rivet and Kennametal
The main advantage of trading using opposite Chicago Rivet and Kennametal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Rivet position performs unexpectedly, Kennametal 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 Kennametal will offset losses from the drop in Kennametal's long position.| Chicago Rivet vs. AMCON Distributing | Chicago Rivet vs. Espey Mfg Electronics | Chicago Rivet vs. Servotronics | Chicago Rivet vs. CompX International |
| Kennametal vs. Hillman Solutions Corp | Kennametal vs. AB SKF | Kennametal vs. Lincoln Electric Holdings | Kennametal vs. Toro Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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