Correlation Between Kerry Group and Kikkoman
Can any of the company-specific risk be diversified away by investing in both Kerry Group and Kikkoman 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 Kikkoman 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 Kikkoman, you can compare the effects of market volatilities on Kerry Group and Kikkoman 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 Kikkoman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Kikkoman.
Diversification Opportunities for Kerry Group and Kikkoman
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kerry and Kikkoman is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group PLC and Kikkoman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kikkoman 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 Kikkoman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kikkoman has no effect on the direction of Kerry Group i.e., Kerry Group and Kikkoman go up and down completely randomly.
Pair Corralation between Kerry Group and Kikkoman
Assuming the 90 days horizon Kerry Group PLC is expected to under-perform the Kikkoman. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kerry Group PLC is 62.95 times less risky than Kikkoman. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Kikkoman is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,031 in Kikkoman on January 24, 2024 and sell it today you would lose (3,741) from holding Kikkoman or give up 74.36% 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. Kikkoman
Performance |
| Timeline |
| Kerry Group PLC |
| Kikkoman |
Kerry Group and Kikkoman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Group and Kikkoman
The main advantage of trading using opposite Kerry Group and Kikkoman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group position performs unexpectedly, Kikkoman 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 Kikkoman will offset losses from the drop in Kikkoman's long position.| Kerry Group vs. Kellanova | Kerry Group vs. Lancaster Colony | Kerry Group vs. The A2 Milk | Kerry Group vs. Artisan Consumer Goods |
| Kikkoman vs. Kellanova | Kikkoman vs. Lancaster Colony | Kikkoman vs. The A2 Milk | Kikkoman 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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