Correlation Between Ingles Markets and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Ingles Markets 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 Ingles Markets and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingles Markets Incorporated and Kesko Oyj ADR, you can compare the effects of market volatilities on Ingles Markets 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 Ingles Markets with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingles Markets and Kesko Oyj.
Diversification Opportunities for Ingles Markets and Kesko Oyj
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ingles and Kesko is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated 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 Ingles Markets 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 Ingles Markets Incorporated 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 Ingles Markets i.e., Ingles Markets and Kesko Oyj go up and down completely randomly.
Pair Corralation between Ingles Markets and Kesko Oyj
Assuming the 90 days horizon Ingles Markets Incorporated is expected to under-perform the Kesko Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Ingles Markets Incorporated is 1.06 times less risky than Kesko Oyj. The stock trades about -0.04 of its potential returns per unit of risk. The Kesko Oyj ADR is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 973.00 in Kesko Oyj ADR on November 9, 2024 and sell it today you would lose (73.00) from holding Kesko Oyj ADR or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ingles Markets Incorporated vs. Kesko Oyj ADR
Performance |
| Timeline |
| Ingles Markets |
| Kesko Oyj ADR |
Ingles Markets and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingles Markets and Kesko Oyj
The main advantage of trading using opposite Ingles Markets and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingles Markets 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.| Ingles Markets vs. Weis Markets | Ingles Markets vs. Natural Grocers by | Ingles Markets vs. Grocery Outlet Holding | Ingles Markets vs. Village Super Market |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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