Correlation Between CSL and Kering SA

Can any of the company-specific risk be diversified away by investing in both CSL and Kering SA 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 CSL and Kering SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSL and Kering SA, you can compare the effects of market volatilities on CSL and Kering SA 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 CSL with a short position of Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Kering SA.

Diversification Opportunities for CSL and Kering SA

0.35

Correlation Coefficient

CSL  Kering SA

Weak diversification

The 3 months correlation between CSL and Kering is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA and CSL 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 CSL are associated (or correlated) with Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of CSL i.e., CSL and Kering SA go up and down completely randomly.

Pair Corralation between CSL and Kering SA

Assuming the 90 days horizon CSL is expected to generate 2.48 times less return on investment than Kering SA. But when comparing it to its historical volatility, CSL is 2.01 times less risky than Kering SA. It trades about 0.11 of its potential returns per unit of risk. Kering SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,860  in Kering SA on April 23, 2025 and sell it today you would earn a total of  437.00  from holding Kering SA or generate 23.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CSL  vs.  Kering SA

CSL

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CSL are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, CSL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Kering SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kering SA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kering SA showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and Kering SA

The main advantage of trading using opposite CSL and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.

The idea behind CSL and Kering SA 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.