Correlation Between Kenon Holdings and Where Food

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

By analyzing existing cross correlation between Kenon Holdings and Where Food Comes, you can compare the effects of market volatilities on Kenon Holdings and Where Food 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 Kenon Holdings with a short position of Where Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and Where Food.

Diversification Opportunities for Kenon Holdings and Where Food

0.17

Correlation Coefficient

Kenon Holdings  Where Food

Average diversification

The 3 months correlation between Kenon and Where is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and Where Food Comes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Where Food Comes and Kenon Holdings 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 Kenon Holdings are associated (or correlated) with Where Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Where Food Comes has no effect on the direction of Kenon Holdings i.e., Kenon Holdings and Where Food go up and down completely randomly.

Pair Corralation between Kenon Holdings and Where Food

Considering the 90-day investment horizon Kenon Holdings is expected to generate 0.68 times more return on investment than Where Food. However, Kenon Holdings is 1.47 times less risky than Where Food. It trades about 0.03 of its potential returns per unit of risk. Where Food Comes is currently generating about -0.06 per unit of risk. If you would invest  3,073  in Kenon Holdings on December 5, 2024 and sell it today you would earn a total of  76.00  from holding Kenon Holdings or generate 2.47% return on investment over 90 days.

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

Kenon Holdings  vs.  Where Food Comes

Kenon Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kenon Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Kenon Holdings is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Where Food Comes

Risk-Adjusted Performance

Very Weak

Over the last 90 days Where Food Comes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Kenon Holdings and Where Food

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

The idea behind Kenon Holdings and Where Food Comes 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.