Correlation Between Church Dwight and Kimberly Clark
Can any of the company-specific risk be diversified away by investing in both Church Dwight and Kimberly Clark 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 Church Dwight and Kimberly Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Church Dwight and Kimberly Clark de Mexico, you can compare the effects of market volatilities on Church Dwight and Kimberly Clark 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 Church Dwight with a short position of Kimberly Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Church Dwight and Kimberly Clark.
Diversification Opportunities for Church Dwight and Kimberly Clark
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Church and Kimberly is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight and Kimberly Clark de Mexico in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark de and Church Dwight 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 Church Dwight are associated (or correlated) with Kimberly Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimberly Clark de has no effect on the direction of Church Dwight i.e., Church Dwight and Kimberly Clark go up and down completely randomly.
Pair Corralation between Church Dwight and Kimberly Clark
Considering the 90-day investment horizon Church Dwight is expected to generate 1.0 times more return on investment than Kimberly Clark. However, Church Dwight is 1.0 times more volatile than Kimberly Clark de Mexico. It trades about 0.32 of its potential returns per unit of risk. Kimberly Clark de Mexico is currently generating about -0.13 per unit of risk. If you would invest 10,229 in Church Dwight on August 24, 2024 and sell it today you would earn a total of 1,073 from holding Church Dwight or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Church Dwight vs. Kimberly Clark de Mexico
Performance |
| Timeline |
| Church Dwight |
| Kimberly Clark de |
Church Dwight and Kimberly Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Church Dwight and Kimberly Clark
The main advantage of trading using opposite Church Dwight and Kimberly Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Church Dwight position performs unexpectedly, Kimberly Clark 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 Kimberly Clark will offset losses from the drop in Kimberly Clark's long position.| Church Dwight vs. Eshallgo Class A | Church Dwight vs. Amtech Systems | Church Dwight vs. Gold Fields Ltd | Church Dwight vs. Aegean Airlines SA |
| Kimberly Clark vs. Reckitt Benckiser Group | Kimberly Clark vs. Church Dwight | Kimberly Clark vs. LOreal Co ADR | Kimberly Clark vs. Shiseido Company |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |