Correlation Between Kadant and Exponent

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

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

Diversification Opportunities for Kadant and Exponent

0.38

Correlation Coefficient

Kadant  Exponent

Weak diversification

The 3 months correlation between Kadant and Exponent is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kadant Inc and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Kadant 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 Kadant Inc are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Kadant i.e., Kadant and Exponent go up and down completely randomly.

Pair Corralation between Kadant and Exponent

Considering the 90-day investment horizon Kadant Inc is expected to under-perform the Exponent. In addition to that, Kadant is 1.32 times more volatile than Exponent. It trades about -0.13 of its total potential returns per unit of risk. Exponent is currently generating about 0.02 per unit of volatility. If you would invest  6,944  in Exponent on August 10, 2025 and sell it today you would earn a total of  113.00  from holding Exponent or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kadant Inc  vs.  Exponent

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 uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Exponent

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exponent are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Exponent is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kadant and Exponent

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

The idea behind Kadant Inc and Exponent 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.