Correlation Between Kohls Corp and Almacenes Xito
Can any of the company-specific risk be diversified away by investing in both Kohls Corp and Almacenes Xito 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 Kohls Corp and Almacenes Xito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kohls Corp and Almacenes xito SA, you can compare the effects of market volatilities on Kohls Corp and Almacenes Xito 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 Kohls Corp with a short position of Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kohls Corp and Almacenes Xito.
Diversification Opportunities for Kohls Corp and Almacenes Xito
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kohls and Almacenes is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kohls Corp and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA and Kohls Corp 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 Kohls Corp are associated (or correlated) with Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of Kohls Corp i.e., Kohls Corp and Almacenes Xito go up and down completely randomly.
Pair Corralation between Kohls Corp and Almacenes Xito
Considering the 90-day investment horizon Kohls Corp is expected to under-perform the Almacenes Xito. In addition to that, Kohls Corp is 3.05 times more volatile than Almacenes xito SA. It trades about -0.16 of its total potential returns per unit of risk. Almacenes xito SA is currently generating about 0.01 per unit of volatility. If you would invest 395.00 in Almacenes xito SA on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Almacenes xito SA or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kohls Corp vs. Almacenes xito SA
Performance |
| Timeline |
| Kohls Corp |
| Almacenes xito SA |
Kohls Corp and Almacenes Xito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kohls Corp and Almacenes Xito
The main advantage of trading using opposite Kohls Corp and Almacenes Xito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kohls Corp position performs unexpectedly, Almacenes Xito 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 Almacenes Xito will offset losses from the drop in Almacenes Xito's long position.| Kohls Corp vs. Nordstrom | Kohls Corp vs. Dillards | Kohls Corp vs. Marks Spencer Group | Kohls Corp vs. Marks and Spencer |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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