Correlation Between Kerry and Dalata Hotel
Can any of the company-specific risk be diversified away by investing in both Kerry and Dalata Hotel 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 and Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerry Group and Dalata Hotel Group, you can compare the effects of market volatilities on Kerry and Dalata Hotel 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 with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry and Dalata Hotel.
Diversification Opportunities for Kerry and Dalata Hotel
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kerry and Dalata is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and Kerry 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 are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Kerry i.e., Kerry and Dalata Hotel go up and down completely randomly.
Pair Corralation between Kerry and Dalata Hotel
Assuming the 90 days trading horizon Kerry Group is expected to under-perform the Dalata Hotel. In addition to that, Kerry is 1.44 times more volatile than Dalata Hotel Group. It trades about -0.16 of its total potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.13 per unit of volatility. If you would invest 422.00 in Dalata Hotel Group on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Dalata Hotel Group or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kerry Group vs. Dalata Hotel Group
Performance |
| Timeline |
| Kerry Group |
| Dalata Hotel Group |
Kerry and Dalata Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry and Dalata Hotel
The main advantage of trading using opposite Kerry and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.| Kerry vs. Kingspan Group plc | Kerry vs. Bank of Ireland | Kerry vs. KLP Aksje Fremvoksende | Kerry vs. Great Western Mining |
| Dalata Hotel vs. AIB Group PLC | Dalata Hotel vs. Bank of Ireland | Dalata Hotel vs. Kingspan Group plc | Dalata Hotel vs. Irish Residential Properties |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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