Correlation Between Kerry Group and Hershey

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

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

Diversification Opportunities for Kerry Group and Hershey

0.12

Correlation Coefficient

Kerry Group  Hershey

Average diversification

The 3 months correlation between Kerry and Hershey is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group PLC and Hershey Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hershey and Kerry Group 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 Group PLC are associated (or correlated) with Hershey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hershey has no effect on the direction of Kerry Group i.e., Kerry Group and Hershey go up and down completely randomly.

Pair Corralation between Kerry Group and Hershey

Assuming the 90 days horizon Kerry Group PLC is expected to generate 1.74 times more return on investment than Hershey. However, Kerry Group is 1.74 times more volatile than Hershey Co. It trades about 0.13 of its potential returns per unit of risk. Hershey Co is currently generating about -0.6 per unit of risk. If you would invest  9,642  in Kerry Group PLC on October 27, 2024 and sell it today you would earn a total of  435.00  from holding Kerry Group PLC or generate 4.51% return on investment over 90 days.

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

Kerry Group PLC  vs.  Hershey Co

Kerry Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kerry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kerry Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hershey

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hershey Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kerry Group and Hershey

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

The idea behind Kerry Group PLC and Hershey Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.