Correlation Between Kerry Group and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Kerry Group and Wilmar International 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 Wilmar International 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 Wilmar International, you can compare the effects of market volatilities on Kerry Group and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Wilmar International.
Diversification Opportunities for Kerry Group and Wilmar International
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kerry and Wilmar is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group PLC and Wilmar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Kerry Group i.e., Kerry Group and Wilmar International go up and down completely randomly.
Pair Corralation between Kerry Group and Wilmar International
Assuming the 90 days horizon Kerry Group PLC is expected to under-perform the Wilmar International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kerry Group PLC is 1.43 times less risky than Wilmar International. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Wilmar International is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,383 in Wilmar International on August 31, 2024 and sell it today you would lose (118.00) from holding Wilmar International or give up 4.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kerry Group PLC vs. Wilmar International
Performance |
| Timeline |
| Kerry Group PLC |
| Wilmar International |
Kerry Group and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Group and Wilmar International
The main advantage of trading using opposite Kerry Group and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| Kerry Group vs. The A2 Milk | Kerry Group vs. Altavoz Entertainment | Kerry Group vs. Artisan Consumer Goods | Kerry Group vs. Avi Ltd ADR |
| Wilmar International vs. Wilmar International Limited | Wilmar International vs. Wesfarmers Ltd ADR | Wilmar International vs. United Overseas Bank | Wilmar International vs. Kerry Group PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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