Correlation Between K Bro and TECSYS

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

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

Diversification Opportunities for K Bro and TECSYS

0.2

Correlation Coefficient

K Bro  TECSYS

Modest diversification

The 3 months correlation between KBL and TECSYS is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and TECSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECSYS Inc and K Bro 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 K Bro Linen are associated (or correlated) with TECSYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECSYS Inc has no effect on the direction of K Bro i.e., K Bro and TECSYS go up and down completely randomly.

Pair Corralation between K Bro and TECSYS

Assuming the 90 days trading horizon K Bro Linen is expected to generate 0.49 times more return on investment than TECSYS. However, K Bro Linen is 2.04 times less risky than TECSYS. It trades about -0.04 of its potential returns per unit of risk. TECSYS Inc is currently generating about -0.03 per unit of risk. If you would invest  3,568  in K Bro Linen on April 25, 2025 and sell it today you would lose (119.00) from holding K Bro Linen or give up 3.34% of portfolio value over 90 days.

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

K Bro Linen  vs.  TECSYS Inc

K Bro Linen

Risk-Adjusted Performance

Very Weak

Over the last 90 days K Bro Linen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, K Bro is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TECSYS Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days TECSYS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, TECSYS is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with K Bro and TECSYS

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

The idea behind K Bro Linen and TECSYS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.