Correlation Between Expand Energy and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Expand Energy 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 Expand Energy and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Kesko Oyj ADR, you can compare the effects of market volatilities on Expand Energy 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 Expand Energy with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Kesko Oyj.
Diversification Opportunities for Expand Energy and Kesko Oyj
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Expand and Kesko is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy 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 Expand Energy 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 Expand Energy 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 Expand Energy i.e., Expand Energy and Kesko Oyj go up and down completely randomly.
Pair Corralation between Expand Energy and Kesko Oyj
Assuming the 90 days horizon Expand Energy is expected to generate 1.32 times more return on investment than Kesko Oyj. However, Expand Energy is 1.32 times more volatile than Kesko Oyj ADR. It trades about 0.38 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about -0.01 per unit of risk. If you would invest 8,963 in Expand Energy on October 24, 2024 and sell it today you would earn a total of 1,169 from holding Expand Energy or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Kesko Oyj ADR
Performance |
| Timeline |
| Expand Energy |
| Kesko Oyj ADR |
Expand Energy and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Kesko Oyj
The main advantage of trading using opposite Expand Energy and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy 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.| Expand Energy vs. NETGEAR | Expand Energy vs. IPG Photonics | Expand Energy vs. Yuexiu Transport Infrastructure | Expand Energy vs. United Microelectronics |
| Kesko Oyj vs. Carrefour SA PK | Kesko Oyj vs. J Sainsbury plc | Kesko Oyj vs. Om Holdings International | Kesko Oyj vs. J Sainsbury PLC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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