Correlation Between Cairn Homes and Kerry

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

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

Diversification Opportunities for Cairn Homes and Kerry

0.0

Correlation Coefficient

Cairn Homes  Kerry

Pay attention - limited upside

The 3 months correlation between Cairn and Kerry is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cairn Homes PLC and Kerry Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Group and Cairn Homes 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 Cairn Homes PLC are associated (or correlated) with Kerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Group has no effect on the direction of Cairn Homes i.e., Cairn Homes and Kerry go up and down completely randomly.

Pair Corralation between Cairn Homes and Kerry

Assuming the 90 days trading horizon Cairn Homes PLC is expected to under-perform the Kerry. In addition to that, Cairn Homes is 1.38 times more volatile than Kerry Group. It trades about -0.16 of its total potential returns per unit of risk. Kerry Group is currently generating about 0.05 per unit of volatility. If you would invest  9,255  in Kerry Group on December 29, 2024 and sell it today you would earn a total of  360.00  from holding Kerry Group or generate 3.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cairn Homes PLC  vs.  Kerry Group

Cairn Homes PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cairn Homes PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kerry Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kerry Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kerry is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Cairn Homes and Kerry

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

The idea behind Cairn Homes PLC and Kerry Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.