Correlation Between Kesko Oyj and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both Kesko Oyj and Grocery Outlet 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 Grocery Outlet 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 Grocery Outlet Holding, you can compare the effects of market volatilities on Kesko Oyj and Grocery Outlet 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 Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Grocery Outlet.
Diversification Opportunities for Kesko Oyj and Grocery Outlet
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kesko and Grocery is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Grocery Outlet go up and down completely randomly.
Pair Corralation between Kesko Oyj and Grocery Outlet
Assuming the 90 days horizon Kesko Oyj ADR is expected to generate 0.61 times more return on investment than Grocery Outlet. However, Kesko Oyj ADR is 1.63 times less risky than Grocery Outlet. It trades about 0.0 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.03 per unit of risk. If you would invest 973.00 in Kesko Oyj ADR on November 9, 2024 and sell it today you would lose (73.00) from holding Kesko Oyj ADR or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kesko Oyj ADR vs. Grocery Outlet Holding
Performance |
| Timeline |
| Kesko Oyj ADR |
| Grocery Outlet Holding |
Kesko Oyj and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kesko Oyj and Grocery Outlet
The main advantage of trading using opposite Kesko Oyj and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kesko Oyj position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet'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 |
| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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