Correlation Between Kering SA and Shoe Carnival

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

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

Diversification Opportunities for Kering SA and Shoe Carnival

0.7

Correlation Coefficient

Kering SA  Shoe Carnival

Poor diversification

The 3 months correlation between Kering and Shoe is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Kering SA and Shoe Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoe Carnival 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 Shoe Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoe Carnival has no effect on the direction of Kering SA i.e., Kering SA and Shoe Carnival go up and down completely randomly.

Pair Corralation between Kering SA and Shoe Carnival

Assuming the 90 days horizon Kering SA is expected to generate 1.04 times more return on investment than Shoe Carnival. However, Kering SA is 1.04 times more volatile than Shoe Carnival. It trades about 0.13 of its potential returns per unit of risk. Shoe Carnival is currently generating about 0.08 per unit of risk. If you would invest  1,995  in Kering SA on May 4, 2025 and sell it today you would earn a total of  506.00  from holding Kering SA or generate 25.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Kering SA  vs.  Shoe Carnival

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.

Shoe Carnival

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shoe Carnival are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Shoe Carnival disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kering SA and Shoe Carnival

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

The idea behind Kering SA and Shoe Carnival 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.