Correlation Between Kesko Oyj and Carrefour
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj and Carrefour 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 Carrefour 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 Carrefour SA, you can compare the effects of market volatilities on Kesko Oyj and Carrefour 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 Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Carrefour.
Diversification Opportunities for Kesko Oyj and Carrefour
Poor diversification
The 3 months correlation between Kesko and Carrefour is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Carrefour SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA 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 Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Carrefour go up and down completely randomly.
Pair Corralation between Kesko Oyj and Carrefour
Assuming the 90 days horizon Kesko Oyj ADR is expected to generate 0.84 times more return on investment than Carrefour. However, Kesko Oyj ADR is 1.19 times less risky than Carrefour. It trades about 0.04 of its potential returns per unit of risk. Carrefour SA is currently generating about -0.02 per unit of risk. If you would invest 931.00 in Kesko Oyj ADR on November 3, 2024 and sell it today you would earn a total of 11.00 from holding Kesko Oyj ADR or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kesko Oyj ADR vs. Carrefour SA
Performance |
| Timeline |
| Kesko Oyj ADR |
| Carrefour SA |
Kesko Oyj and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesko Oyj and Carrefour
The main advantage of trading using opposite Kesko Oyj and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour's long position.| Kesko Oyj vs. Carrefour SA PK | Kesko Oyj vs. J Sainsbury plc | Kesko Oyj vs. Om Holdings International | Kesko Oyj vs. J Sainsbury PLC |
| Carrefour vs. J Sainsbury plc | Carrefour vs. Om Holdings International | Carrefour vs. Carrefour SA PK | Carrefour vs. Kesko Oyj 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |