Correlation Between Koninklijke Ahold and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold 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 Koninklijke Ahold and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and Kesko Oyj ADR, you can compare the effects of market volatilities on Koninklijke Ahold 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 Koninklijke Ahold with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and Kesko Oyj.
Diversification Opportunities for Koninklijke Ahold and Kesko Oyj
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Koninklijke and Kesko is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize 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 Koninklijke Ahold 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 Koninklijke Ahold Delhaize 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 Koninklijke Ahold i.e., Koninklijke Ahold and Kesko Oyj go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and Kesko Oyj
Assuming the 90 days horizon Koninklijke Ahold Delhaize is expected to under-perform the Kesko Oyj. But the otc stock apears to be less risky and, when comparing its historical volatility, Koninklijke Ahold Delhaize is 1.82 times less risky than Kesko Oyj. The otc stock trades about -0.04 of its potential returns per unit of risk. The Kesko Oyj ADR is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,004 in Kesko Oyj ADR on September 4, 2024 and sell it today you would lose (18.00) from holding Kesko Oyj ADR or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. Kesko Oyj ADR
Performance |
| Timeline |
| Koninklijke Ahold |
| Kesko Oyj ADR |
Koninklijke Ahold and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and Kesko Oyj
The main advantage of trading using opposite Koninklijke Ahold and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold 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.| Koninklijke Ahold vs. Kesko Oyj ADR | Koninklijke Ahold vs. Om Holdings International | Koninklijke Ahold vs. Tesco PLC | Koninklijke Ahold vs. Carrefour SA |
| Kesko Oyj vs. Carrefour SA PK | Kesko Oyj vs. J Sainsbury plc | Kesko Oyj vs. Om Holdings International | Kesko Oyj vs. J Sainsbury PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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