Correlation Between Village Super and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Village Super 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 Village Super and Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Super Market and Kesko Oyj ADR, you can compare the effects of market volatilities on Village Super 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 Village Super with a short position of Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Super and Kesko Oyj.
Diversification Opportunities for Village Super and Kesko Oyj
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Village and Kesko is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market 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 Village Super 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 Village Super Market 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 Village Super i.e., Village Super and Kesko Oyj go up and down completely randomly.
Pair Corralation between Village Super and Kesko Oyj
Assuming the 90 days horizon Village Super Market is expected to generate 1.12 times more return on investment than Kesko Oyj. However, Village Super is 1.12 times more volatile than Kesko Oyj ADR. It trades about 0.07 of its potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.0 per unit of risk. If you would invest 2,066 in Village Super Market on November 9, 2024 and sell it today you would earn a total of 1,464 from holding Village Super Market or generate 70.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Village Super Market vs. Kesko Oyj ADR
Performance |
| Timeline |
| Village Super Market |
| Kesko Oyj ADR |
Village Super and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Super and Kesko Oyj
The main advantage of trading using opposite Village Super and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Super 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.| Village Super vs. Ingles Markets Incorporated | Village Super vs. Natural Grocers by | Village Super vs. Grocery Outlet Holding | Village Super vs. Weis Markets |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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