Correlation Between Kerry Group and Universal Robina
Can any of the company-specific risk be diversified away by investing in both Kerry Group and Universal Robina 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 Kerry Group and Universal Robina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerry Group plc and Universal Robina, you can compare the effects of market volatilities on Kerry Group and Universal Robina 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 Kerry Group with a short position of Universal Robina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Universal Robina.
Diversification Opportunities for Kerry Group and Universal Robina
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kerry and Universal is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group plc and Universal Robina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Robina and Kerry 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 Kerry Group plc are associated (or correlated) with Universal Robina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Robina has no effect on the direction of Kerry Group i.e., Kerry Group and Universal Robina go up and down completely randomly.
Pair Corralation between Kerry Group and Universal Robina
Assuming the 90 days horizon Kerry Group plc is expected to generate 0.1 times more return on investment than Universal Robina. However, Kerry Group plc is 10.38 times less risky than Universal Robina. It trades about -0.23 of its potential returns per unit of risk. Universal Robina is currently generating about -0.18 per unit of risk. If you would invest 8,662 in Kerry Group plc on January 18, 2024 and sell it today you would lose (210.00) from holding Kerry Group plc or give up 2.42% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kerry Group plc vs. Universal Robina
Performance |
Timeline |
Kerry Group plc |
Universal Robina |
Kerry Group and Universal Robina Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kerry Group and Universal Robina
The main advantage of trading using opposite Kerry Group and Universal Robina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group position performs unexpectedly, Universal Robina 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 Universal Robina will offset losses from the drop in Universal Robina's long position.Kerry Group vs. Kerry Group PLC | Kerry Group vs. Danone SA | Kerry Group vs. Carlsberg AS | Kerry Group vs. China Mengniu Dairy |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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