Correlation Between Kikkoman Corp and Emmi AG
Can any of the company-specific risk be diversified away by investing in both Kikkoman Corp and Emmi AG 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 Kikkoman Corp and Emmi AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kikkoman Corp ADR and Emmi AG, you can compare the effects of market volatilities on Kikkoman Corp and Emmi AG 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 Kikkoman Corp with a short position of Emmi AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kikkoman Corp and Emmi AG.
Diversification Opportunities for Kikkoman Corp and Emmi AG
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kikkoman and Emmi is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kikkoman Corp ADR and Emmi AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emmi AG and Kikkoman Corp 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 Kikkoman Corp ADR are associated (or correlated) with Emmi AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emmi AG has no effect on the direction of Kikkoman Corp i.e., Kikkoman Corp and Emmi AG go up and down completely randomly.
Pair Corralation between Kikkoman Corp and Emmi AG
Assuming the 90 days horizon Kikkoman Corp ADR is expected to under-perform the Emmi AG. In addition to that, Kikkoman Corp is 1.72 times more volatile than Emmi AG. It trades about -0.23 of its total potential returns per unit of risk. Emmi AG is currently generating about -0.16 per unit of volatility. If you would invest 99,000 in Emmi AG on November 30, 2024 and sell it today you would lose (9,237) from holding Emmi AG or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Kikkoman Corp ADR vs. Emmi AG
Performance |
| Timeline |
| Kikkoman Corp ADR |
| Emmi AG |
Kikkoman Corp and Emmi AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kikkoman Corp and Emmi AG
The main advantage of trading using opposite Kikkoman Corp and Emmi AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kikkoman Corp position performs unexpectedly, Emmi AG 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 Emmi AG will offset losses from the drop in Emmi AG's long position.| Kikkoman Corp vs. Emmi AG | Kikkoman Corp vs. Kerry Group PLC | Kikkoman Corp vs. Associated British Foods | Kikkoman Corp vs. Nestle SA ADR |
| Emmi AG vs. Kikkoman Corp ADR | Emmi AG vs. Kerry Group PLC | Emmi AG vs. Associated British Foods | Emmi AG vs. Nestle SA ADR |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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