Correlation Between Kohls Corp and Marks Spencer

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

By analyzing existing cross correlation between Kohls Corp and Marks Spencer Group, you can compare the effects of market volatilities on Kohls Corp and Marks Spencer 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 Marks Spencer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kohls Corp and Marks Spencer.

Diversification Opportunities for Kohls Corp and Marks Spencer

0.22

Correlation Coefficient

Kohls Corp  Marks Spencer

Modest diversification

The 3 months correlation between Kohls and Marks is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kohls Corp and Marks Spencer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks Spencer Group 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 Marks Spencer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks Spencer Group has no effect on the direction of Kohls Corp i.e., Kohls Corp and Marks Spencer go up and down completely randomly.

Pair Corralation between Kohls Corp and Marks Spencer

Considering the 90-day investment horizon Kohls Corp is expected to under-perform the Marks Spencer. In addition to that, Kohls Corp is 1.71 times more volatile than Marks Spencer Group. It trades about -0.09 of its total potential returns per unit of risk. Marks Spencer Group is currently generating about 0.11 per unit of volatility. If you would invest  784.00  in Marks Spencer Group on August 30, 2024 and sell it today you would earn a total of  204.00  from holding Marks Spencer Group or generate 26.02% return on investment over 90 days.

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

Kohls Corp  vs.  Marks Spencer Group

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 December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Marks Spencer Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marks Spencer Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Marks Spencer may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Kohls Corp and Marks Spencer

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

The idea behind Kohls Corp and Marks Spencer Group 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..