Correlation Between Kesko Oyj and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj and Koninklijke Ahold 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 Kesko Oyj and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kesko Oyj ADR and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Kesko Oyj and Koninklijke Ahold 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 Kesko Oyj with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Koninklijke Ahold.
Diversification Opportunities for Kesko Oyj and Koninklijke Ahold
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kesko and Koninklijke is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Kesko Oyj 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 Kesko Oyj ADR are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Kesko Oyj and Koninklijke Ahold
Assuming the 90 days horizon Kesko Oyj ADR is expected to under-perform the Koninklijke Ahold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kesko Oyj ADR is 1.53 times less risky than Koninklijke Ahold. The pink sheet trades about -0.44 of its potential returns per unit of risk. The Koninklijke Ahold Delhaize is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,260 in Koninklijke Ahold Delhaize on September 5, 2024 and sell it today you would earn a total of 75.00 from holding Koninklijke Ahold Delhaize or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kesko Oyj ADR vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Kesko Oyj ADR |
| Koninklijke Ahold |
Kesko Oyj and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesko Oyj and Koninklijke Ahold
The main advantage of trading using opposite Kesko Oyj and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Kesko Oyj vs. Tesco PLC | Kesko Oyj vs. Carrefour SA | Kesko Oyj vs. J Sainsbury plc | Kesko Oyj vs. Carrefour SA PK |
| Koninklijke Ahold vs. Weis Markets | Koninklijke Ahold vs. Albertsons Companies | Koninklijke Ahold vs. Dingdong ADR | Koninklijke Ahold vs. Natural Grocers by |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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