Correlation Between Kohls Corp and Marks
Can any of the company-specific risk be diversified away by investing in both Kohls Corp and Marks 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 Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kohls Corp and Marks and Spencer, you can compare the effects of market volatilities on Kohls Corp and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kohls Corp and Marks.
Diversification Opportunities for Kohls Corp and Marks
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kohls and Marks is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kohls Corp and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Kohls Corp i.e., Kohls Corp and Marks go up and down completely randomly.
Pair Corralation between Kohls Corp and Marks
Considering the 90-day investment horizon Kohls Corp is expected to generate 0.49 times more return on investment than Marks. However, Kohls Corp is 2.03 times less risky than Marks. It trades about -0.11 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.22 per unit of risk. If you would invest 1,403 in Kohls Corp on November 2, 2024 and sell it today you would lose (60.00) from holding Kohls Corp or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kohls Corp vs. Marks and Spencer
Performance |
| Timeline |
| Kohls Corp |
| Marks and Spencer |
Kohls Corp and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kohls Corp and Marks
The main advantage of trading using opposite Kohls Corp and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kohls Corp position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Kohls Corp vs. Nordstrom | Kohls Corp vs. Dillards | Kohls Corp vs. Marks Spencer Group | Kohls Corp vs. Marks and Spencer |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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