Correlation Between KERRY EXPRESS and CENTRAL RETAIL

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

By analyzing existing cross correlation between KERRY EXPRESS and CENTRAL RETAIL P, you can compare the effects of market volatilities on KERRY EXPRESS and CENTRAL RETAIL 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 KERRY EXPRESS with a short position of CENTRAL RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KERRY EXPRESS and CENTRAL RETAIL.

Diversification Opportunities for KERRY EXPRESS and CENTRAL RETAIL

-0.16

Correlation Coefficient

KERRY EXPRESS  CENTRAL RETAIL

Good diversification

The 3 months correlation between KERRY and CENTRAL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding KERRY EXPRESS and CENTRAL RETAIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTRAL RETAIL P and KERRY EXPRESS 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 KERRY EXPRESS are associated (or correlated) with CENTRAL RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTRAL RETAIL P has no effect on the direction of KERRY EXPRESS i.e., KERRY EXPRESS and CENTRAL RETAIL go up and down completely randomly.

Pair Corralation between KERRY EXPRESS and CENTRAL RETAIL

Assuming the 90 days trading horizon KERRY EXPRESS is expected to under-perform the CENTRAL RETAIL. In addition to that, KERRY EXPRESS is 1.62 times more volatile than CENTRAL RETAIL P. It trades about -0.1 of its total potential returns per unit of risk. CENTRAL RETAIL P is currently generating about -0.13 per unit of volatility. If you would invest  3,925  in CENTRAL RETAIL P on December 29, 2024 and sell it today you would lose (1,375) from holding CENTRAL RETAIL P or give up 35.03% of portfolio value over 90 days.

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

KERRY EXPRESS  vs.  CENTRAL RETAIL P

KERRY EXPRESS

Risk-Adjusted Performance

Very Weak

Over the last 90 days KERRY EXPRESS 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CENTRAL RETAIL P

Risk-Adjusted Performance

Very Weak

Over the last 90 days CENTRAL RETAIL P 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KERRY EXPRESS and CENTRAL RETAIL

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

The idea behind KERRY EXPRESS and CENTRAL RETAIL P 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.