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, 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
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Church and Kimberly is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Church Dwight and Kimberly Clark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark 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 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 1.4 times more return on investment than Kimberly Clark. However, Church Dwight is 1.4 times more volatile than Kimberly Clark. It trades about 0.03 of its potential returns per unit of risk. Kimberly Clark is currently generating about -0.17 per unit of risk. If you would invest 10,585 in Church Dwight on October 20, 2024 and sell it today you would earn a total of 62.00 from holding Church Dwight or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Church Dwight vs. Kimberly Clark
Performance |
| Timeline |
| Church Dwight |
| Kimberly Clark |
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. Kimberly Clark | Church Dwight vs. Colgate Palmolive | Church Dwight vs. Unilever PLC ADR | Church Dwight vs. Procter Gamble |
| Kimberly Clark vs. Colgate Palmolive | Kimberly Clark vs. Church Dwight | Kimberly Clark vs. Unilever PLC ADR | Kimberly Clark vs. Procter Gamble |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |