Correlation Between Kerry Group and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both Kerry Group and Chocoladefabriken 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 Chocoladefabriken 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 Chocoladefabriken Lindt Sprngli, you can compare the effects of market volatilities on Kerry Group and Chocoladefabriken 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 Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Chocoladefabriken.
Diversification Opportunities for Kerry Group and Chocoladefabriken
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kerry and Chocoladefabriken is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group plc and Chocoladefabriken Lindt Sprngl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of Kerry Group i.e., Kerry Group and Chocoladefabriken go up and down completely randomly.
Pair Corralation between Kerry Group and Chocoladefabriken
Assuming the 90 days horizon Kerry Group is expected to generate 1.3 times less return on investment than Chocoladefabriken. In addition to that, Kerry Group is 1.34 times more volatile than Chocoladefabriken Lindt Sprngli. It trades about 0.01 of its total potential returns per unit of risk. Chocoladefabriken Lindt Sprngli is currently generating about 0.02 per unit of volatility. If you would invest 1,002,603 in Chocoladefabriken Lindt Sprngli on September 14, 2024 and sell it today you would earn a total of 112,397 from holding Chocoladefabriken Lindt Sprngli or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.11% |
| Values | Daily Returns |
Kerry Group plc vs. Chocoladefabriken Lindt Sprngl
Performance |
| Timeline |
| Kerry Group plc |
| Chocoladefabriken Lindt |
Kerry Group and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Group and Chocoladefabriken
The main advantage of trading using opposite Kerry Group and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken'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 |
| Chocoladefabriken vs. Mondelez International | Chocoladefabriken vs. Tootsie Roll Industries | Chocoladefabriken vs. Rocky Mountain Chocolate | Chocoladefabriken vs. Barry Callebaut AG |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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