Correlation Between Colgate Palmolive and Kenvue
Can any of the company-specific risk be diversified away by investing in both Colgate Palmolive and Kenvue 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 Colgate Palmolive and Kenvue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Colgate Palmolive and Kenvue Inc, you can compare the effects of market volatilities on Colgate Palmolive and Kenvue 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 Colgate Palmolive with a short position of Kenvue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Colgate Palmolive and Kenvue.
Diversification Opportunities for Colgate Palmolive and Kenvue
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Colgate and Kenvue is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Colgate Palmolive and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue Inc and Colgate Palmolive 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 Colgate Palmolive are associated (or correlated) with Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of Colgate Palmolive i.e., Colgate Palmolive and Kenvue go up and down completely randomly.
Pair Corralation between Colgate Palmolive and Kenvue
Allowing for the 90-day total investment horizon Colgate Palmolive is expected to generate 0.59 times more return on investment than Kenvue. However, Colgate Palmolive is 1.7 times less risky than Kenvue. It trades about 0.07 of its potential returns per unit of risk. Kenvue Inc is currently generating about -0.01 per unit of risk. If you would invest 6,824 in Colgate Palmolive on November 1, 2024 and sell it today you would earn a total of 2,265 from holding Colgate Palmolive or generate 33.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Colgate Palmolive vs. Kenvue Inc
Performance |
| Timeline |
| Colgate Palmolive |
| Kenvue Inc |
Colgate Palmolive and Kenvue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Colgate Palmolive and Kenvue
The main advantage of trading using opposite Colgate Palmolive and Kenvue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Colgate Palmolive position performs unexpectedly, Kenvue 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 Kenvue will offset losses from the drop in Kenvue's long position.| Colgate Palmolive vs. The Clorox | Colgate Palmolive vs. Procter Gamble | Colgate Palmolive vs. Unilever PLC ADR | Colgate Palmolive vs. Church Dwight |
| Kenvue vs. Highway Holdings Limited | Kenvue vs. Emerson Electric | Kenvue vs. Topbuild Corp | Kenvue vs. Hurco Companies |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |