Correlation Between Nasdaq and Kerry Group
Can any of the company-specific risk be diversified away by investing in both Nasdaq and Kerry Group 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 Nasdaq and Kerry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq Inc and Kerry Group PLC, you can compare the effects of market volatilities on Nasdaq and Kerry Group 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 Nasdaq with a short position of Kerry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Kerry Group.
Diversification Opportunities for Nasdaq and Kerry Group
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nasdaq and Kerry is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Kerry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Group PLC and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Kerry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Group PLC has no effect on the direction of Nasdaq i.e., Nasdaq and Kerry Group go up and down completely randomly.
Pair Corralation between Nasdaq and Kerry Group
Given the investment horizon of 90 days Nasdaq Inc is expected to generate 0.38 times more return on investment than Kerry Group. However, Nasdaq Inc is 2.61 times less risky than Kerry Group. It trades about 0.62 of its potential returns per unit of risk. Kerry Group PLC is currently generating about -0.04 per unit of risk. If you would invest 7,392 in Nasdaq Inc on September 1, 2024 and sell it today you would earn a total of 907.00 from holding Nasdaq Inc or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq Inc vs. Kerry Group PLC
Performance |
| Timeline |
| Nasdaq Inc |
| Kerry Group PLC |
Nasdaq and Kerry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq and Kerry Group
The main advantage of trading using opposite Nasdaq and Kerry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq position performs unexpectedly, Kerry Group 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 Group will offset losses from the drop in Kerry Group's long position.The idea behind Nasdaq Inc and Kerry Group PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kerry Group vs. The A2 Milk | Kerry Group vs. Altavoz Entertainment | Kerry Group vs. Artisan Consumer Goods | Kerry Group vs. General Mills |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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