Correlation Between Reckitt Benckiser and Kimberly Clark

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

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

Diversification Opportunities for Reckitt Benckiser and Kimberly Clark

-0.43

Correlation Coefficient

Reckitt Benckiser  Kimberly Clark

Very good diversification

The 3 months correlation between Reckitt and Kimberly is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Reckitt Benckiser Group and Kimberly Clark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark and Reckitt Benckiser 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 Reckitt Benckiser Group are associated (or correlated) with Kimberly Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimberly Clark has no effect on the direction of Reckitt Benckiser i.e., Reckitt Benckiser and Kimberly Clark go up and down completely randomly.

Pair Corralation between Reckitt Benckiser and Kimberly Clark

Assuming the 90 days horizon Reckitt Benckiser Group is expected to generate 1.22 times more return on investment than Kimberly Clark. However, Reckitt Benckiser is 1.22 times more volatile than Kimberly Clark. It trades about 0.12 of its potential returns per unit of risk. Kimberly Clark is currently generating about 0.02 per unit of risk. If you would invest  1,334  in Reckitt Benckiser Group on May 6, 2025 and sell it today you would earn a total of  158.00  from holding Reckitt Benckiser Group or generate 11.84% return on investment over 90 days.

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

Reckitt Benckiser Group  vs.  Kimberly Clark

Reckitt Benckiser

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Reckitt Benckiser Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Reckitt Benckiser may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Kimberly Clark

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kimberly Clark are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Kimberly Clark is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Reckitt Benckiser and Kimberly Clark

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

The idea behind Reckitt Benckiser Group and Kimberly Clark 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.