Correlation Between Kering SA and Watches Of

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

By analyzing existing cross correlation between Kering SA and Watches of Switzerland, you can compare the effects of market volatilities on Kering SA and Watches Of 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 Kering SA with a short position of Watches Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kering SA and Watches Of.

Diversification Opportunities for Kering SA and Watches Of

0.22

Correlation Coefficient

Kering SA  Watches Of

Modest diversification

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

Pair Corralation between Kering SA and Watches Of

Assuming the 90 days horizon Kering SA is expected to generate 1.37 times more return on investment than Watches Of. However, Kering SA is 1.37 times more volatile than Watches of Switzerland. It trades about -0.03 of its potential returns per unit of risk. Watches of Switzerland is currently generating about -0.12 per unit of risk. If you would invest  23,537  in Kering SA on December 30, 2024 and sell it today you would lose (2,111) from holding Kering SA or give up 8.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Kering SA  vs.  Watches of Switzerland

Kering SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kering SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Watches of Switzerland

Risk-Adjusted Performance

Very Weak

Over the last 90 days Watches of Switzerland has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kering SA and Watches Of

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

The idea behind Kering SA and Watches of Switzerland 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.