Correlation Between Kingspan Group and Glanbia PLC
Can any of the company-specific risk be diversified away by investing in both Kingspan Group 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 Kingspan Group and Glanbia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingspan Group plc and Glanbia PLC, you can compare the effects of market volatilities on Kingspan Group 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 Kingspan Group with a short position of Glanbia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingspan Group and Glanbia PLC.
Diversification Opportunities for Kingspan Group and Glanbia PLC
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kingspan and Glanbia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kingspan Group plc and Glanbia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glanbia PLC and Kingspan Group 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 Kingspan Group 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 Kingspan Group i.e., Kingspan Group and Glanbia PLC go up and down completely randomly.
Pair Corralation between Kingspan Group and Glanbia PLC
Assuming the 90 days trading horizon Kingspan Group plc is expected to under-perform the Glanbia PLC. But the stock apears to be less risky and, when comparing its historical volatility, Kingspan Group plc is 1.03 times less risky than Glanbia PLC. The stock trades about -0.16 of its potential returns per unit of risk. The Glanbia PLC is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 1,588 in Glanbia PLC on August 28, 2024 and sell it today you would lose (109.00) from holding Glanbia PLC or give up 6.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingspan Group plc vs. Glanbia PLC
Performance |
| Timeline |
| Kingspan Group plc |
| Glanbia PLC |
Kingspan Group and Glanbia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingspan Group and Glanbia PLC
The main advantage of trading using opposite Kingspan Group and Glanbia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingspan Group 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.| Kingspan Group vs. Kerry Group | Kingspan Group vs. Glanbia PLC | Kingspan Group vs. Bank of Ireland | Kingspan Group vs. Dalata Hotel Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |