Correlation Between Virgin Group and Kimberly Clark
Can any of the company-specific risk be diversified away by investing in both Virgin Group 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 Virgin Group and Kimberly Clark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virgin Group Acquisition and Kimberly Clark, you can compare the effects of market volatilities on Virgin Group 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 Virgin Group with a short position of Kimberly Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virgin Group and Kimberly Clark.
Diversification Opportunities for Virgin Group and Kimberly Clark
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Virgin and Kimberly is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Virgin Group Acquisition and Kimberly Clark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark and Virgin Group 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 Virgin Group Acquisition 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 has no effect on the direction of Virgin Group i.e., Virgin Group and Kimberly Clark go up and down completely randomly.
Pair Corralation between Virgin Group and Kimberly Clark
Given the investment horizon of 90 days Virgin Group Acquisition is expected to generate 4.71 times more return on investment than Kimberly Clark. However, Virgin Group is 4.71 times more volatile than Kimberly Clark. It trades about 0.02 of its potential returns per unit of risk. Kimberly Clark is currently generating about 0.04 per unit of risk. If you would invest 207.00 in Virgin Group Acquisition on December 2, 2024 and sell it today you would lose (42.00) from holding Virgin Group Acquisition or give up 20.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virgin Group Acquisition vs. Kimberly Clark
Performance |
| Timeline |
| Virgin Group Acquisition |
| Kimberly Clark |
Virgin Group and Kimberly Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virgin Group and Kimberly Clark
The main advantage of trading using opposite Virgin Group and Kimberly Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virgin Group 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.| Virgin Group vs. Mannatech Incorporated | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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