Correlation Between Bet-at-home and Kering SA

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

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

Diversification Opportunities for Bet-at-home and Kering SA

0.39

Correlation Coefficient

Bet-at-home  Kering SA

Weak diversification

The 3 months correlation between Bet-at-home and Kering is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA and Bet-at-home 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 bet at home AG 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 Bet-at-home i.e., Bet-at-home and Kering SA go up and down completely randomly.

Pair Corralation between Bet-at-home and Kering SA

Assuming the 90 days trading horizon bet at home AG is expected to under-perform the Kering SA. But the stock apears to be less risky and, when comparing its historical volatility, bet at home AG is 1.43 times less risky than Kering SA. The stock trades about -0.11 of its potential returns per unit of risk. The Kering SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  22,540  in Kering SA on September 28, 2024 and sell it today you would earn a total of  1,120  from holding Kering SA or generate 4.97% return on investment over 90 days.

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

bet at home AG  vs.  Kering SA

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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. Despite nearly stable basic indicators, Kering SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bet-at-home and Kering SA

The main advantage of trading using opposite Bet-at-home and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet-at-home 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 bet at home AG 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.