Correlation Between Dingdong ADR and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Dingdong ADR 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 Dingdong ADR and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dingdong ADR and Kesko Oyj ADR, you can compare the effects of market volatilities on Dingdong ADR 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 Dingdong ADR with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dingdong ADR and Kesko Oyj.
Diversification Opportunities for Dingdong ADR and Kesko Oyj
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dingdong and Kesko is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dingdong ADR 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 Dingdong ADR 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 Dingdong ADR 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 Dingdong ADR i.e., Dingdong ADR and Kesko Oyj go up and down completely randomly.
Pair Corralation between Dingdong ADR and Kesko Oyj
Considering the 90-day investment horizon Dingdong ADR is expected to generate 3.38 times more return on investment than Kesko Oyj. However, Dingdong ADR is 3.38 times more volatile than Kesko Oyj ADR. It trades about 0.09 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.03 per unit of risk. If you would invest 189.00 in Dingdong ADR on September 2, 2024 and sell it today you would earn a total of 239.00 from holding Dingdong ADR or generate 126.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Dingdong ADR vs. Kesko Oyj ADR
Performance |
| Timeline |
| Dingdong ADR |
| Kesko Oyj ADR |
Dingdong ADR and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dingdong ADR and Kesko Oyj
The main advantage of trading using opposite Dingdong ADR and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dingdong ADR 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.| Dingdong ADR vs. Village Super Market | Dingdong ADR vs. Weis Markets | Dingdong ADR vs. Sendas Distribuidora SA | Dingdong ADR vs. Ingles Markets Incorporated |
| Kesko Oyj vs. Carrefour SA PK | Kesko Oyj vs. J Sainsbury PLC | Kesko Oyj vs. Sendas Distribuidora SA | Kesko Oyj vs. Weis Markets |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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