Correlation Between CP All and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both CP All and Kesko Oyj 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 CP All and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CP All PCL and Kesko Oyj ADR, you can compare the effects of market volatilities on CP All and Kesko Oyj 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 CP All with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP All and Kesko Oyj.
Diversification Opportunities for CP All and Kesko Oyj
Very good diversification
The 3 months correlation between CPPCY and Kesko is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CP All PCL and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR and CP All 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 CP All PCL are associated (or correlated) with Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of CP All i.e., CP All and Kesko Oyj go up and down completely randomly.
Pair Corralation between CP All and Kesko Oyj
Assuming the 90 days horizon CP All PCL is expected to generate 2.91 times more return on investment than Kesko Oyj. However, CP All is 2.91 times more volatile than Kesko Oyj ADR. It trades about 0.03 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.02 per unit of risk. If you would invest 1,697 in CP All PCL on September 12, 2024 and sell it today you would earn a total of 255.00 from holding CP All PCL or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.5% |
| Values | Daily Returns |
CP All PCL vs. Kesko Oyj ADR
Performance |
| Timeline |
| CP All PCL |
| Kesko Oyj ADR |
CP All and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP All and Kesko Oyj
The main advantage of trading using opposite CP All and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP All position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| CP All vs. Weibo Corp | CP All vs. Skechers USA | CP All vs. Juniata Valley Financial | CP All vs. Pintec Technology Holdings |
| Kesko Oyj vs. Natural Grocers by | Kesko Oyj vs. Grocery Outlet Holding | Kesko Oyj vs. Village Super Market | Kesko Oyj vs. Ingles Markets Incorporated |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |