Correlation Between Kering SA and Brunello Cucinelli

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

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

Diversification Opportunities for Kering SA and Brunello Cucinelli

0.59

Correlation Coefficient

Kering SA  Brunello Cucinelli

Very weak diversification

The 3 months correlation between Kering and Brunello is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and Brunello Cucinelli SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunello Cucinelli SpA and Kering SA 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 Kering SA are associated (or correlated) with Brunello Cucinelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunello Cucinelli SpA has no effect on the direction of Kering SA i.e., Kering SA and Brunello Cucinelli go up and down completely randomly.

Pair Corralation between Kering SA and Brunello Cucinelli

Assuming the 90 days horizon Kering SA is expected to generate 11.27 times less return on investment than Brunello Cucinelli. In addition to that, Kering SA is 1.37 times more volatile than Brunello Cucinelli SpA. It trades about 0.0 of its total potential returns per unit of risk. Brunello Cucinelli SpA is currently generating about 0.07 per unit of volatility. If you would invest  4,996  in Brunello Cucinelli SpA on September 21, 2024 and sell it today you would earn a total of  482.00  from holding Brunello Cucinelli SpA or generate 9.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Kering SA  vs.  Brunello Cucinelli SpA

Kering SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kering SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kering SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brunello Cucinelli SpA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brunello Cucinelli SpA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Brunello Cucinelli may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kering SA and Brunello Cucinelli

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

The idea behind Kering SA and Brunello Cucinelli SpA 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.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..