Correlation Between Bowhead Specialty and Kerry Logistics

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

By analyzing existing cross correlation between Bowhead Specialty Holdings and Kerry Logistics Network, you can compare the effects of market volatilities on Bowhead Specialty and Kerry Logistics 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 Bowhead Specialty with a short position of Kerry Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bowhead Specialty and Kerry Logistics.

Diversification Opportunities for Bowhead Specialty and Kerry Logistics

-0.07

Correlation Coefficient

Bowhead Specialty  Kerry Logistics

Good diversification

The 3 months correlation between Bowhead and Kerry is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bowhead Specialty Holdings and Kerry Logistics Network in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Logistics Network and Bowhead Specialty 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 Bowhead Specialty Holdings are associated (or correlated) with Kerry Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Logistics Network has no effect on the direction of Bowhead Specialty i.e., Bowhead Specialty and Kerry Logistics go up and down completely randomly.

Pair Corralation between Bowhead Specialty and Kerry Logistics

Considering the 90-day investment horizon Bowhead Specialty Holdings is expected to generate 0.49 times more return on investment than Kerry Logistics. However, Bowhead Specialty Holdings is 2.04 times less risky than Kerry Logistics. It trades about 0.09 of its potential returns per unit of risk. Kerry Logistics Network is currently generating about -0.05 per unit of risk. If you would invest  2,380  in Bowhead Specialty Holdings on October 11, 2024 and sell it today you would earn a total of  803.00  from holding Bowhead Specialty Holdings or generate 33.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.27%
Values	Daily Returns

Bowhead Specialty Holdings  vs.  Kerry Logistics Network

Bowhead Specialty

Risk-Adjusted Performance

5 of 100

Modest

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

Kerry Logistics Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kerry Logistics Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bowhead Specialty and Kerry Logistics

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

The idea behind Bowhead Specialty Holdings and Kerry Logistics Network 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.