Correlation Between Kerry Group and Hershey
Can any of the company-specific risk be diversified away by investing in both Kerry Group and Hershey 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 Kerry Group and Hershey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerry Group plc and Hershey Co, you can compare the effects of market volatilities on Kerry Group and Hershey 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 Kerry Group with a short position of Hershey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Hershey.
Diversification Opportunities for Kerry Group and Hershey
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kerry and Hershey is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group plc and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey and Kerry 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 Kerry Group plc are associated (or correlated) with Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Kerry Group i.e., Kerry Group and Hershey go up and down completely randomly.
Pair Corralation between Kerry Group and Hershey
Assuming the 90 days horizon Kerry Group plc is expected to generate 1.46 times more return on investment than Hershey. However, Kerry Group is 1.46 times more volatile than Hershey Co. It trades about 0.01 of its potential returns per unit of risk. Hershey Co is currently generating about -0.03 per unit of risk. If you would invest 8,763 in Kerry Group plc on September 14, 2024 and sell it today you would earn a total of 185.00 from holding Kerry Group plc or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.11% |
| Values | Daily Returns |
Kerry Group plc vs. Hershey Co
Performance |
| Timeline |
| Kerry Group plc |
| Hershey |
Kerry Group and Hershey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Group and Hershey
The main advantage of trading using opposite Kerry Group and Hershey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group position performs unexpectedly, Hershey 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 Hershey will offset losses from the drop in Hershey's long position.| Kerry Group vs. Kerry Group PLC | Kerry Group vs. Danone SA | Kerry Group vs. Carlsberg AS | Kerry Group vs. China Mengniu Dairy |
| Hershey vs. Tootsie Roll Industries | Hershey vs. Rocky Mountain Chocolate | Hershey vs. Chocoladefabriken Lindt Sprngli | Hershey vs. Mondelez International |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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