Correlation Between Albertsons Companies and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Kesko Oyj 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 Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Kesko Oyj ADR, you can compare the effects of market volatilities on Albertsons Companies and Kesko Oyj 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 Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Kesko Oyj.
Diversification Opportunities for Albertsons Companies and Kesko Oyj
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Albertsons and Kesko is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR 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 Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Kesko Oyj go up and down completely randomly.
Pair Corralation between Albertsons Companies and Kesko Oyj
Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.54 times more return on investment than Kesko Oyj. However, Albertsons Companies is 1.84 times less risky than Kesko Oyj. It trades about 0.2 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.09 per unit of risk. If you would invest 1,834 in Albertsons Companies on August 27, 2024 and sell it today you would earn a total of 104.00 from holding Albertsons Companies or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Kesko Oyj ADR
Performance |
| Timeline |
| Albertsons Companies |
| Kesko Oyj ADR |
Albertsons Companies and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Kesko Oyj
The main advantage of trading using opposite Albertsons Companies and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| Albertsons Companies vs. Innovative Food Hldg | Albertsons Companies vs. Calavo Growers | Albertsons Companies vs. The Chefs Warehouse | Albertsons Companies vs. AMCON Distributing |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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