Correlation Between Leo Global and Kerry Express
Can any of the company-specific risk be diversified away by investing in both Leo Global and Kerry Express 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 Leo Global and Kerry Express into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leo Global Logistics and Kerry Express Public, you can compare the effects of market volatilities on Leo Global and Kerry Express 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 Leo Global with a short position of Kerry Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leo Global and Kerry Express.
Diversification Opportunities for Leo Global and Kerry Express
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Leo and Kerry is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Leo Global Logistics and Kerry Express Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Express Public and Leo Global 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 Leo Global Logistics are associated (or correlated) with Kerry Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Express Public has no effect on the direction of Leo Global i.e., Leo Global and Kerry Express go up and down completely randomly.
Pair Corralation between Leo Global and Kerry Express
Assuming the 90 days trading horizon Leo Global Logistics is expected to generate 0.68 times more return on investment than Kerry Express. However, Leo Global Logistics is 1.48 times less risky than Kerry Express. It trades about -0.09 of its potential returns per unit of risk. Kerry Express Public is currently generating about -0.12 per unit of risk. If you would invest 1,184 in Leo Global Logistics on August 30, 2024 and sell it today you would lose (826.00) from holding Leo Global Logistics or give up 69.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leo Global Logistics vs. Kerry Express Public
Performance |
| Timeline |
| Leo Global Logistics |
| Kerry Express Public |
Leo Global and Kerry Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leo Global and Kerry Express
The main advantage of trading using opposite Leo Global and Kerry Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leo Global position performs unexpectedly, Kerry Express 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 Kerry Express will offset losses from the drop in Kerry Express' long position.| Leo Global vs. Mega Lifesciences Public | Leo Global vs. Sonic Interfreight Public | Leo Global vs. Jay Mart Public | Leo Global vs. AP Public |
| Kerry Express vs. Mega Lifesciences Public | Kerry Express vs. Jay Mart Public | Kerry Express vs. AP Public | Kerry Express vs. KCE Electronics Public |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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