Correlation Between North American and Kering SA
Can any of the company-specific risk be diversified away by investing in both North American and Kering SA 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 North American and Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and Kering SA, you can compare the effects of market volatilities on North American and Kering SA 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 North American with a short position of Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Kering SA.
Diversification Opportunities for North American and Kering SA
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between North and Kering is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA and North American 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 North American Construction are associated (or correlated) with Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of North American i.e., North American and Kering SA go up and down completely randomly.
Pair Corralation between North American and Kering SA
Assuming the 90 days horizon North American Construction is expected to generate 1.01 times more return on investment than Kering SA. However, North American is 1.01 times more volatile than Kering SA. It trades about 0.0 of its potential returns per unit of risk. Kering SA is currently generating about -0.05 per unit of risk. If you would invest 1,995 in North American Construction on November 3, 2024 and sell it today you would lose (105.00) from holding North American Construction or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
North American Construction vs. Kering SA
Performance |
| Timeline |
| North American Const |
| Kering SA |
North American and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Kering SA
The main advantage of trading using opposite North American and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| North American vs. ScanSource | North American vs. China National Building | North American vs. Sumitomo Rubber Industries | North American vs. TITANIUM TRANSPORTGROUP |
| Kering SA vs. BOS BETTER ONLINE | Kering SA vs. CODERE ONLINE LUX | Kering SA vs. T MOBILE US | Kering SA vs. Geely Automobile Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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