Correlation Between Wells Fargo and KFT
Can any of the company-specific risk be diversified away by investing in both Wells Fargo and KFT 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 Wells Fargo and KFT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo and KFT, you can compare the effects of market volatilities on Wells Fargo and KFT 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 Wells Fargo with a short position of KFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and KFT.
Diversification Opportunities for Wells Fargo and KFT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Wells and KFT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo and KFT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KFT and Wells Fargo 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 Wells Fargo are associated (or correlated) with KFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KFT has no effect on the direction of Wells Fargo i.e., Wells Fargo and KFT go up and down completely randomly.
Pair Corralation between Wells Fargo and KFT
If you would invest 5,668 in Wells Fargo on January 26, 2024 and sell it today you would earn a total of 392.00 from holding Wells Fargo or generate 6.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Wells Fargo vs. KFT
Performance |
Timeline |
Wells Fargo |
KFT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Wells Fargo and KFT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wells Fargo and KFT
The main advantage of trading using opposite Wells Fargo and KFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo position performs unexpectedly, KFT 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 KFT will offset losses from the drop in KFT's long position.Wells Fargo vs. Bank of America | Wells Fargo vs. JPMorgan Chase Co | Wells Fargo vs. Toronto Dominion Bank | Wells Fargo vs. Nu Holdings |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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