Correlation Between Ovoca Gold and Kerry

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

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

Diversification Opportunities for Ovoca Gold and Kerry

-0.19

Correlation Coefficient

Ovoca Gold  Kerry

Good diversification

The 3 months correlation between Ovoca and Kerry is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ovoca Gold PLC and Kerry Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Group and Ovoca Gold 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 Ovoca Gold PLC are associated (or correlated) with Kerry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Group has no effect on the direction of Ovoca Gold i.e., Ovoca Gold and Kerry go up and down completely randomly.

Pair Corralation between Ovoca Gold and Kerry

Assuming the 90 days trading horizon Ovoca Gold PLC is expected to generate 27.14 times more return on investment than Kerry. However, Ovoca Gold is 27.14 times more volatile than Kerry Group. It trades about 0.13 of its potential returns per unit of risk. Kerry Group is currently generating about 0.02 per unit of risk. If you would invest  0.55  in Ovoca Gold PLC on September 1, 2024 and sell it today you would earn a total of  1.30  from holding Ovoca Gold PLC or generate 236.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Ovoca Gold PLC  vs.  Kerry Group

Ovoca Gold PLC

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ovoca Gold PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ovoca Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Kerry Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kerry Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kerry is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ovoca Gold and Kerry

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

The idea behind Ovoca Gold PLC and Kerry 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.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.