Correlation Between Clorox and Kimberly Clark
Can any of the company-specific risk be diversified away by investing in both Clorox 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 Clorox and Kimberly Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Clorox and Kimberly Clark de Mexico, you can compare the effects of market volatilities on Clorox 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 Clorox with a short position of Kimberly Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clorox and Kimberly Clark.
Diversification Opportunities for Clorox and Kimberly Clark
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clorox and Kimberly is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Clorox 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 Clorox 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 The Clorox 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 Clorox i.e., Clorox and Kimberly Clark go up and down completely randomly.
Pair Corralation between Clorox and Kimberly Clark
Considering the 90-day investment horizon The Clorox is expected to under-perform the Kimberly Clark. But the stock apears to be less risky and, when comparing its historical volatility, The Clorox is 2.01 times less risky than Kimberly Clark. The stock trades about -0.1 of its potential returns per unit of risk. The Kimberly Clark de Mexico is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 694.00 in Kimberly Clark de Mexico on October 20, 2024 and sell it today you would earn a total of 19.00 from holding Kimberly Clark de Mexico or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Clorox vs. Kimberly Clark de Mexico
Performance |
| Timeline |
| Clorox |
| Kimberly Clark de |
Clorox and Kimberly Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clorox and Kimberly Clark
The main advantage of trading using opposite Clorox and Kimberly Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clorox 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.| Clorox vs. Colgate Palmolive | Clorox vs. Procter Gamble | Clorox vs. Unilever PLC ADR | Clorox vs. Church Dwight |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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