Correlation Between Kerry Group and Want Want

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Can any of the company-specific risk be diversified away by investing in both Kerry Group and Want Want 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 Want Want 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 Want Want China, you can compare the effects of market volatilities on Kerry Group and Want Want 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 Want Want. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Want Want.

Diversification Opportunities for Kerry Group and Want Want

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Kerry and Want is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group Plc and Want Want China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Want Want China 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 Want Want. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Want Want China has no effect on the direction of Kerry Group i.e., Kerry Group and Want Want go up and down completely randomly.

Pair Corralation between Kerry Group and Want Want

Assuming the 90 days horizon Kerry Group Plc is expected to generate 1.05 times more return on investment than Want Want. However, Kerry Group is 1.05 times more volatile than Want Want China. It trades about 0.0 of its potential returns per unit of risk. Want Want China is currently generating about -0.01 per unit of risk. If you would invest  9,030  in Kerry Group Plc on December 19, 2023 and sell it today you would lose (280.00) from holding Kerry Group Plc or give up 3.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy92.37%
ValuesDaily Returns

Kerry Group Plc  vs.  Want Want China

 Performance 
       Timeline  
Kerry Group Plc 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kerry Group Plc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Kerry Group may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Want Want China 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Want Want China has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Kerry Group and Want Want Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kerry Group and Want Want

The main advantage of trading using opposite Kerry Group and Want Want positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group position performs unexpectedly, Want Want 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 Want Want will offset losses from the drop in Want Want's long position.
The idea behind Kerry Group Plc and Want Want China 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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