Correlation Between Carrefour and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Carrefour 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 Carrefour and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA PK and Kesko Oyj ADR, you can compare the effects of market volatilities on Carrefour 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 Carrefour with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and Kesko Oyj.
Diversification Opportunities for Carrefour and Kesko Oyj
Average diversification
The 3 months correlation between Carrefour and Kesko is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA PK 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 Carrefour 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 Carrefour SA PK 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 Carrefour i.e., Carrefour and Kesko Oyj go up and down completely randomly.
Pair Corralation between Carrefour and Kesko Oyj
Assuming the 90 days horizon Carrefour SA PK is expected to under-perform the Kesko Oyj. But the pink sheet apears to be less risky and, when comparing its historical volatility, Carrefour SA PK is 1.01 times less risky than Kesko Oyj. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Kesko Oyj ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 965.00 in Kesko Oyj ADR on August 24, 2024 and sell it today you would earn a total of 24.00 from holding Kesko Oyj ADR or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carrefour SA PK vs. Kesko Oyj ADR
Performance |
| Timeline |
| Carrefour SA PK |
| Kesko Oyj ADR |
Carrefour and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrefour and Kesko Oyj
The main advantage of trading using opposite Carrefour and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour 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.| Carrefour vs. Natural Grocers by | Carrefour vs. Grocery Outlet Holding | Carrefour vs. Village Super Market | Carrefour vs. Ingles Markets Incorporated |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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