Correlation Between Kenmare Resources and Glanbia PLC
Can any of the company-specific risk be diversified away by investing in both Kenmare Resources and Glanbia PLC 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 Kenmare Resources and Glanbia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenmare Resources PLC and Glanbia PLC, you can compare the effects of market volatilities on Kenmare Resources and Glanbia PLC 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 Kenmare Resources with a short position of Glanbia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenmare Resources and Glanbia PLC.
Diversification Opportunities for Kenmare Resources and Glanbia PLC
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kenmare and Glanbia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kenmare Resources PLC and Glanbia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glanbia PLC and Kenmare Resources 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 Kenmare Resources PLC are associated (or correlated) with Glanbia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glanbia PLC has no effect on the direction of Kenmare Resources i.e., Kenmare Resources and Glanbia PLC go up and down completely randomly.
Pair Corralation between Kenmare Resources and Glanbia PLC
Assuming the 90 days trading horizon Kenmare Resources PLC is expected to under-perform the Glanbia PLC. In addition to that, Kenmare Resources is 1.77 times more volatile than Glanbia PLC. It trades about -0.01 of its total potential returns per unit of risk. Glanbia PLC is currently generating about 0.02 per unit of volatility. If you would invest 1,351 in Glanbia PLC on August 31, 2024 and sell it today you would earn a total of 111.00 from holding Glanbia PLC or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Kenmare Resources PLC vs. Glanbia PLC
Performance |
| Timeline |
| Kenmare Resources PLC |
| Glanbia PLC |
Kenmare Resources and Glanbia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenmare Resources and Glanbia PLC
The main advantage of trading using opposite Kenmare Resources and Glanbia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenmare Resources position performs unexpectedly, Glanbia PLC 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 Glanbia PLC will offset losses from the drop in Glanbia PLC's long position.| Kenmare Resources vs. AIB Group PLC | Kenmare Resources vs. Dalata Hotel Group | Kenmare Resources vs. Uniphar Group PLC | Kenmare Resources vs. Greencoat Renewables PLC |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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