Correlation Between Associated British and Kerry Group

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Can any of the company-specific risk be diversified away by investing in both Associated British 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 Associated British and Kerry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated British Foods and Kerry Group PLC, you can compare the effects of market volatilities on Associated British 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 Associated British with a short position of Kerry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated British and Kerry Group.

Diversification Opportunities for Associated British and Kerry Group

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Associated and Kerry is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Associated British Foods 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 Associated British 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 Associated British Foods 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 Associated British i.e., Associated British and Kerry Group go up and down completely randomly.

Pair Corralation between Associated British and Kerry Group

If you would invest  2,882  in Associated British Foods on December 30, 2023 and sell it today you would earn a total of  271.00  from holding Associated British Foods or generate 9.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Associated British Foods  vs.  Kerry Group PLC

 Performance 
       Timeline  
Associated British Foods 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Associated British Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Associated British may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Kerry Group PLC 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Weak
Over the last 90 days Kerry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kerry Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Associated British and Kerry Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Associated British and Kerry Group

The main advantage of trading using opposite Associated British and Kerry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated British 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 Associated British Foods 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.
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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