Correlation Between KENNAMETAL INC and Comcast

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Can any of the company-specific risk be diversified away by investing in both KENNAMETAL INC and Comcast 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 KENNAMETAL INC and Comcast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENNAMETAL INC and Comcast, you can compare the effects of market volatilities on KENNAMETAL INC and Comcast 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 KENNAMETAL INC with a short position of Comcast. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENNAMETAL INC and Comcast.

Diversification Opportunities for KENNAMETAL INC and Comcast

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between KENNAMETAL and Comcast is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding KENNAMETAL INC and Comcast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast and KENNAMETAL INC 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 KENNAMETAL INC are associated (or correlated) with Comcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast has no effect on the direction of KENNAMETAL INC i.e., KENNAMETAL INC and Comcast go up and down completely randomly.

Pair Corralation between KENNAMETAL INC and Comcast

Assuming the 90 days trading horizon KENNAMETAL INC is expected to generate 1.37 times more return on investment than Comcast. However, KENNAMETAL INC is 1.37 times more volatile than Comcast. It trades about 0.22 of its potential returns per unit of risk. Comcast is currently generating about 0.0 per unit of risk. If you would invest  1,644  in KENNAMETAL INC on April 23, 2025 and sell it today you would earn a total of  456.00  from holding KENNAMETAL INC or generate 27.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

KENNAMETAL INC  vs.  Comcast

 Performance 
       Timeline  
KENNAMETAL INC 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in KENNAMETAL INC are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, KENNAMETAL INC exhibited solid returns over the last few months and may actually be approaching a breakup point.
Comcast 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Comcast has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Comcast is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KENNAMETAL INC and Comcast Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KENNAMETAL INC and Comcast

The main advantage of trading using opposite KENNAMETAL INC and Comcast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENNAMETAL INC position performs unexpectedly, Comcast 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 Comcast will offset losses from the drop in Comcast's long position.
The idea behind KENNAMETAL INC and Comcast 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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