Correlation Between Kohls Corp and Almacenes Xito

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

By analyzing existing cross correlation between Kohls Corp and Almacenes xito SA, you can compare the effects of market volatilities on Kohls Corp and Almacenes Xito 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 Kohls Corp with a short position of Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kohls Corp and Almacenes Xito.

Diversification Opportunities for Kohls Corp and Almacenes Xito

0.74

Correlation Coefficient

Kohls Corp  Almacenes Xito

Poor diversification

The 3 months correlation between Kohls and Almacenes is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kohls Corp and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA and Kohls Corp 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 Kohls Corp are associated (or correlated) with Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of Kohls Corp i.e., Kohls Corp and Almacenes Xito go up and down completely randomly.

Pair Corralation between Kohls Corp and Almacenes Xito

Considering the 90-day investment horizon Kohls Corp is expected to generate 1.11 times more return on investment than Almacenes Xito. However, Kohls Corp is 1.11 times more volatile than Almacenes xito SA. It trades about -0.01 of its potential returns per unit of risk. Almacenes xito SA is currently generating about -0.03 per unit of risk. If you would invest  2,389  in Kohls Corp on October 4, 2024 and sell it today you would lose (986.00) from holding Kohls Corp or give up 41.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	69.35%
Values	Daily Returns

Kohls Corp  vs.  Almacenes xito SA

Kohls Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kohls Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Almacenes xito SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Almacenes xito SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Kohls Corp and Almacenes Xito

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

The idea behind Kohls Corp and Almacenes xito SA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.