Correlation Between Coloplast and Kerry Group
Can any of the company-specific risk be diversified away by investing in both Coloplast and Kerry Group 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 Coloplast and Kerry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloplast A and Kerry Group PLC, you can compare the effects of market volatilities on Coloplast and Kerry Group 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 Coloplast with a short position of Kerry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloplast and Kerry Group.
Diversification Opportunities for Coloplast and Kerry Group
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Coloplast and Kerry is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast A and Kerry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Group PLC and Coloplast 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 Coloplast A are associated (or correlated) with Kerry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Group PLC has no effect on the direction of Coloplast i.e., Coloplast and Kerry Group go up and down completely randomly.
Pair Corralation between Coloplast and Kerry Group
Assuming the 90 days horizon Coloplast is expected to generate 1.2 times less return on investment than Kerry Group. But when comparing it to its historical volatility, Coloplast A is 1.48 times less risky than Kerry Group. It trades about 0.46 of its potential returns per unit of risk. Kerry Group PLC is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 9,533 in Kerry Group PLC on November 2, 2024 and sell it today you would earn a total of 978.00 from holding Kerry Group PLC or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloplast A vs. Kerry Group PLC
Performance |
| Timeline |
| Coloplast A |
| Kerry Group PLC |
Coloplast and Kerry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloplast and Kerry Group
The main advantage of trading using opposite Coloplast and Kerry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast position performs unexpectedly, Kerry Group 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 Kerry Group will offset losses from the drop in Kerry Group's long position.| Coloplast vs. Straumann Holding AG | Coloplast vs. Hoya Corp | Coloplast vs. EssilorLuxottica Socit anonyme | Coloplast vs. Essilor International SA |
| Kerry Group vs. Associated British Foods | Kerry Group vs. Bunzl plc | Kerry Group vs. Ashtead Gro | Kerry Group vs. Coloplast A |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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