Correlation Between Kerry Group and WH Group
Can any of the company-specific risk be diversified away by investing in both Kerry Group and WH 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 Kerry Group and WH Group 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 WH Group Ltd, you can compare the effects of market volatilities on Kerry Group and WH 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 Kerry Group with a short position of WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and WH Group.
Diversification Opportunities for Kerry Group and WH Group
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kerry and WHGLY is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group plc and WH Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group has no effect on the direction of Kerry Group i.e., Kerry Group and WH Group go up and down completely randomly.
Pair Corralation between Kerry Group and WH Group
Assuming the 90 days horizon Kerry Group plc is expected to under-perform the WH Group. In addition to that, Kerry Group is 1.14 times more volatile than WH Group Ltd. It trades about -0.01 of its total potential returns per unit of risk. WH Group Ltd is currently generating about 0.0 per unit of volatility. If you would invest 1,422 in WH Group Ltd on January 21, 2024 and sell it today you would lose (48.00) from holding WH Group Ltd or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.65% |
| Values | Daily Returns |
Kerry Group plc vs. WH Group Ltd
Performance |
| Timeline |
| Kerry Group plc |
| WH Group |
Kerry Group and WH Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Group and WH Group
The main advantage of trading using opposite Kerry Group and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group position performs unexpectedly, WH 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 WH Group will offset losses from the drop in WH Group's long position.| Kerry Group vs. Kellanova | Kerry Group vs. Lancaster Colony | Kerry Group vs. The A2 Milk | Kerry Group vs. Artisan Consumer Goods |
| WH Group vs. Kellanova | WH Group vs. Lancaster Colony | WH Group vs. The A2 Milk | WH Group vs. Artisan Consumer Goods |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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