Correlation Between Kerry Logistics and Amazon

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

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

Diversification Opportunities for Kerry Logistics and Amazon

-0.01

Correlation Coefficient

Kerry Logistics  Amazon

Good diversification

The 3 months correlation between Kerry and Amazon is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Logistics Network and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc and Kerry Logistics 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 Logistics Network are associated (or correlated) with Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of Kerry Logistics i.e., Kerry Logistics and Amazon go up and down completely randomly.

Pair Corralation between Kerry Logistics and Amazon

Assuming the 90 days horizon Kerry Logistics Network is expected to generate 1.33 times more return on investment than Amazon. However, Kerry Logistics is 1.33 times more volatile than Amazon Inc. It trades about 0.18 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.15 per unit of risk. If you would invest  77.00  in Kerry Logistics Network on September 2, 2024 and sell it today you would earn a total of  23.00  from holding Kerry Logistics Network or generate 29.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Kerry Logistics Network  vs.  Amazon Inc

Kerry Logistics Network

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kerry Logistics Network are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Kerry Logistics reported solid returns over the last few months and may actually be approaching a breakup point.

Amazon Inc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kerry Logistics and Amazon

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

The idea behind Kerry Logistics Network and Amazon Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.