Correlation Between Ocado Group and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Ocado Group and Kesko Oyj 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 Ocado Group and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocado Group plc and Kesko Oyj ADR, you can compare the effects of market volatilities on Ocado Group and Kesko Oyj 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 Ocado Group with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocado Group and Kesko Oyj.
Diversification Opportunities for Ocado Group and Kesko Oyj
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ocado and Kesko is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ocado Group plc and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR and Ocado Group 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 Ocado Group plc are associated (or correlated) with Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of Ocado Group i.e., Ocado Group and Kesko Oyj go up and down completely randomly.
Pair Corralation between Ocado Group and Kesko Oyj
Assuming the 90 days horizon Ocado Group plc is expected to under-perform the Kesko Oyj. In addition to that, Ocado Group is 2.79 times more volatile than Kesko Oyj ADR. It trades about -0.02 of its total potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.03 per unit of volatility. If you would invest 878.00 in Kesko Oyj ADR on August 28, 2024 and sell it today you would earn a total of 121.00 from holding Kesko Oyj ADR or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocado Group plc vs. Kesko Oyj ADR
Performance |
| Timeline |
| Ocado Group plc |
| Kesko Oyj ADR |
Ocado Group and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocado Group and Kesko Oyj
The main advantage of trading using opposite Ocado Group and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocado Group position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| Ocado Group vs. Natural Grocers by | Ocado Group vs. Grocery Outlet Holding | Ocado Group vs. Village Super Market | Ocado Group vs. Ingles Markets Incorporated |
| Kesko Oyj vs. Natural Grocers by | Kesko Oyj vs. Grocery Outlet Holding | Kesko Oyj vs. Village Super Market | Kesko Oyj vs. Ingles Markets Incorporated |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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