Correlation Between Kuehne Nagel and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Kuehne Nagel and Legrand SA 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 Kuehne Nagel and Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuehne Nagel International and Legrand SA ADR, you can compare the effects of market volatilities on Kuehne Nagel and Legrand SA 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 Kuehne Nagel with a short position of Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuehne Nagel and Legrand SA.
Diversification Opportunities for Kuehne Nagel and Legrand SA
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kuehne and Legrand is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kuehne Nagel International and Legrand SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA ADR and Kuehne Nagel 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 Kuehne Nagel International are associated (or correlated) with Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA ADR has no effect on the direction of Kuehne Nagel i.e., Kuehne Nagel and Legrand SA go up and down completely randomly.
Pair Corralation between Kuehne Nagel and Legrand SA
Assuming the 90 days horizon Kuehne Nagel International is expected to generate 0.68 times more return on investment than Legrand SA. However, Kuehne Nagel International is 1.46 times less risky than Legrand SA. It trades about -0.17 of its potential returns per unit of risk. Legrand SA ADR is currently generating about -0.31 per unit of risk. If you would invest 4,996 in Kuehne Nagel International on September 1, 2024 and sell it today you would lose (231.00) from holding Kuehne Nagel International or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuehne Nagel International vs. Legrand SA ADR
Performance |
| Timeline |
| Kuehne Nagel Interna |
| Legrand SA ADR |
Kuehne Nagel and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuehne Nagel and Legrand SA
The main advantage of trading using opposite Kuehne Nagel and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuehne Nagel position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| Kuehne Nagel vs. United Parcel Service | Kuehne Nagel vs. FedEx | Kuehne Nagel vs. GXO Logistics | Kuehne Nagel vs. JB Hunt Transport |
| Legrand SA vs. AFC Energy plc | Legrand SA vs. Loop Energy | Legrand SA vs. Sunrise New Energy | Legrand SA vs. Energizer Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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