Correlation Between Albertsons Companies and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Kenon Holdings 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 Albertsons Companies and Kenon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Kenon Holdings, you can compare the effects of market volatilities on Albertsons Companies and Kenon Holdings 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 Albertsons Companies with a short position of Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Kenon Holdings.
Diversification Opportunities for Albertsons Companies and Kenon Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Albertsons and Kenon is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Kenon Holdings go up and down completely randomly.
Pair Corralation between Albertsons Companies and Kenon Holdings
Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.8 times more return on investment than Kenon Holdings. However, Albertsons Companies is 1.25 times less risky than Kenon Holdings. It trades about 0.16 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.12 per unit of risk. If you would invest 1,980 in Albertsons Companies on November 28, 2024 and sell it today you would earn a total of 89.00 from holding Albertsons Companies or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Kenon Holdings
Performance |
| Timeline |
| Albertsons Companies |
| Kenon Holdings |
Albertsons Companies and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Kenon Holdings
The main advantage of trading using opposite Albertsons Companies and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Kenon Holdings 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' long position.| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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