Correlation Between Tate Lyle and Kerry Group
Can any of the company-specific risk be diversified away by investing in both Tate Lyle 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 Tate Lyle and Kerry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tate Lyle PLC and Kerry Group PLC, you can compare the effects of market volatilities on Tate Lyle 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 Tate Lyle with a short position of Kerry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tate Lyle and Kerry Group.
Diversification Opportunities for Tate Lyle and Kerry Group
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tate and Kerry is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Tate Lyle PLC 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 Tate Lyle 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 Tate Lyle PLC 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 Tate Lyle i.e., Tate Lyle and Kerry Group go up and down completely randomly.
Pair Corralation between Tate Lyle and Kerry Group
Assuming the 90 days horizon Tate Lyle PLC is expected to under-perform the Kerry Group. But the otc stock apears to be less risky and, when comparing its historical volatility, Tate Lyle PLC is 1.13 times less risky than Kerry Group. The otc stock trades about -0.06 of its potential returns per unit of risk. The Kerry Group PLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 9,343 in Kerry Group PLC on January 20, 2024 and sell it today you would lose (867.00) from holding Kerry Group PLC or give up 9.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tate Lyle PLC vs. Kerry Group PLC
Performance |
| Timeline |
| Tate Lyle PLC |
| Kerry Group PLC |
Tate Lyle and Kerry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tate Lyle and Kerry Group
The main advantage of trading using opposite Tate Lyle and Kerry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tate Lyle 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.| Tate Lyle vs. Mannatech Incorporated | Tate Lyle vs. Edgewell Personal Care | Tate Lyle vs. Inter Parfums | Tate Lyle vs. Nu Skin Enterprises |
| Kerry Group vs. Kellanova | Kerry Group vs. Lancaster Colony | Kerry Group vs. The A2 Milk | Kerry 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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