Correlation Between Kuehne Nagel and Kone Oyj

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

By analyzing existing cross correlation between Kuehne Nagel International and Kone Oyj ADR, you can compare the effects of market volatilities on Kuehne Nagel and Kone Oyj 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 Kuehne Nagel with a short position of Kone Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuehne Nagel and Kone Oyj.

Diversification Opportunities for Kuehne Nagel and Kone Oyj

0.95

Correlation Coefficient

Kuehne Nagel  Kone Oyj

Almost no diversification

The 3 months correlation between Kuehne and Kone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Kuehne Nagel International and Kone Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kone Oyj ADR and Kuehne Nagel 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 Kuehne Nagel International are associated (or correlated) with Kone Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kone Oyj ADR has no effect on the direction of Kuehne Nagel i.e., Kuehne Nagel and Kone Oyj go up and down completely randomly.

Pair Corralation between Kuehne Nagel and Kone Oyj

Assuming the 90 days horizon Kuehne Nagel International is expected to under-perform the Kone Oyj. But the pink sheet apears to be less risky and, when comparing its historical volatility, Kuehne Nagel International is 1.04 times less risky than Kone Oyj. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Kone Oyj ADR is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  2,442  in Kone Oyj ADR on October 26, 2024 and sell it today you would earn a total of  54.00  from holding Kone Oyj ADR or generate 2.21% return on investment over 90 days.

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

Kuehne Nagel International  vs.  Kone Oyj ADR

Kuehne Nagel Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kuehne Nagel International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kone Oyj ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kone Oyj ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kuehne Nagel and Kone Oyj

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

The idea behind Kuehne Nagel International and Kone Oyj ADR 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.