Correlation Between Kesko Oyj and Dingdong ADR
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj and Dingdong ADR 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 Dingdong ADR 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 Dingdong ADR, you can compare the effects of market volatilities on Kesko Oyj and Dingdong ADR 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 Dingdong ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Dingdong ADR.
Diversification Opportunities for Kesko Oyj and Dingdong ADR
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kesko and Dingdong is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Dingdong ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dingdong ADR 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 Dingdong ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dingdong ADR has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Dingdong ADR go up and down completely randomly.
Pair Corralation between Kesko Oyj and Dingdong ADR
Assuming the 90 days horizon Kesko Oyj is expected to generate 9.28 times less return on investment than Dingdong ADR. But when comparing it to its historical volatility, Kesko Oyj ADR is 3.38 times less risky than Dingdong ADR. It trades about 0.03 of its potential returns per unit of risk. Dingdong ADR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 189.00 in Dingdong ADR on September 2, 2024 and sell it today you would earn a total of 239.00 from holding Dingdong ADR or generate 126.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.6% |
Values | Daily Returns |
Kesko Oyj ADR vs. Dingdong ADR
Performance |
Timeline |
Kesko Oyj ADR |
Dingdong ADR |
Kesko Oyj and Dingdong ADR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kesko Oyj and Dingdong ADR
The main advantage of trading using opposite Kesko Oyj and Dingdong ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj position performs unexpectedly, Dingdong ADR 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 Dingdong ADR will offset losses from the drop in Dingdong ADR's long position.Kesko Oyj vs. Carrefour SA PK | Kesko Oyj vs. J Sainsbury PLC | Kesko Oyj vs. Sendas Distribuidora SA | Kesko Oyj vs. Weis Markets |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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