Correlation Between Kimberly Clark and Kenvue
Can any of the company-specific risk be diversified away by investing in both Kimberly Clark and Kenvue 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 Kimberly Clark and Kenvue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimberly Clark and Kenvue Inc, you can compare the effects of market volatilities on Kimberly Clark and Kenvue 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 Kimberly Clark with a short position of Kenvue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimberly Clark and Kenvue.
Diversification Opportunities for Kimberly Clark and Kenvue
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kimberly and Kenvue is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kimberly Clark and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue Inc and Kimberly Clark 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 Kimberly Clark are associated (or correlated) with Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and Kenvue go up and down completely randomly.
Pair Corralation between Kimberly Clark and Kenvue
Considering the 90-day investment horizon Kimberly Clark is expected to generate 0.64 times more return on investment than Kenvue. However, Kimberly Clark is 1.55 times less risky than Kenvue. It trades about 0.03 of its potential returns per unit of risk. Kenvue Inc is currently generating about -0.01 per unit of risk. If you would invest 11,548 in Kimberly Clark on November 1, 2024 and sell it today you would earn a total of 1,537 from holding Kimberly Clark or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 92.19% |
| Values | Daily Returns |
Kimberly Clark vs. Kenvue Inc
Performance |
| Timeline |
| Kimberly Clark |
| Kenvue Inc |
Kimberly Clark and Kenvue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimberly Clark and Kenvue
The main advantage of trading using opposite Kimberly Clark and Kenvue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimberly Clark position performs unexpectedly, Kenvue 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 Kenvue will offset losses from the drop in Kenvue's long position.| Kimberly Clark vs. Colgate Palmolive | Kimberly Clark vs. Church Dwight | Kimberly Clark vs. Unilever PLC ADR | Kimberly Clark vs. Procter Gamble |
| Kenvue vs. Highway Holdings Limited | Kenvue vs. Emerson Electric | Kenvue vs. Topbuild Corp | Kenvue vs. Hurco Companies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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