Correlation Between Kerry Express and Sonic Interfreight
Can any of the company-specific risk be diversified away by investing in both Kerry Express and Sonic Interfreight 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 Kerry Express and Sonic Interfreight into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerry Express Public and Sonic Interfreight Public, you can compare the effects of market volatilities on Kerry Express and Sonic Interfreight 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 Kerry Express with a short position of Sonic Interfreight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Express and Sonic Interfreight.
Diversification Opportunities for Kerry Express and Sonic Interfreight
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kerry and Sonic is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Express Public and Sonic Interfreight Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Interfreight Public and Kerry Express 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 Kerry Express Public are associated (or correlated) with Sonic Interfreight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonic Interfreight Public has no effect on the direction of Kerry Express i.e., Kerry Express and Sonic Interfreight go up and down completely randomly.
Pair Corralation between Kerry Express and Sonic Interfreight
Assuming the 90 days trading horizon Kerry Express Public is expected to under-perform the Sonic Interfreight. In addition to that, Kerry Express is 2.25 times more volatile than Sonic Interfreight Public. It trades about -0.45 of its total potential returns per unit of risk. Sonic Interfreight Public is currently generating about -0.13 per unit of volatility. If you would invest 163.00 in Sonic Interfreight Public on November 29, 2024 and sell it today you would lose (7.00) from holding Sonic Interfreight Public or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Kerry Express Public vs. Sonic Interfreight Public
Performance |
| Timeline |
| Kerry Express Public |
| Sonic Interfreight Public |
Kerry Express and Sonic Interfreight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Express and Sonic Interfreight
The main advantage of trading using opposite Kerry Express and Sonic Interfreight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Express position performs unexpectedly, Sonic Interfreight 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 Sonic Interfreight will offset losses from the drop in Sonic Interfreight's long position.| Kerry Express vs. Mega Lifesciences Public | Kerry Express vs. Sonic Interfreight Public | Kerry Express vs. Jay Mart Public | Kerry Express vs. AP Public |
| Sonic Interfreight vs. North East Rubbers | Sonic Interfreight vs. KCE Electronics Public | Sonic Interfreight vs. AP Public | Sonic Interfreight vs. S P V |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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