Correlation Between PUMA SE and Kering SA

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

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

Diversification Opportunities for PUMA SE and Kering SA

-0.26

Correlation Coefficient

PUMA SE  Kering SA

Very good diversification

The 3 months correlation between PUMA and Kering is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding PUMA SE and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA and PUMA SE 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 PUMA SE are associated (or correlated) with Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of PUMA SE i.e., PUMA SE and Kering SA go up and down completely randomly.

Pair Corralation between PUMA SE and Kering SA

Assuming the 90 days horizon PUMA SE is expected to generate 1.17 times more return on investment than Kering SA. However, PUMA SE is 1.17 times more volatile than Kering SA. It trades about -0.02 of its potential returns per unit of risk. Kering SA is currently generating about -0.07 per unit of risk. If you would invest  6,034  in PUMA SE on October 15, 2024 and sell it today you would lose (1,774) from holding PUMA SE or give up 29.4% of portfolio value over 90 days.

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

PUMA SE  vs.  Kering SA

PUMA SE

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PUMA SE are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PUMA SE reported solid returns over the last few months and may actually be approaching a breakup point.

Kering SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kering SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kering SA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PUMA SE and Kering SA

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

The idea behind PUMA SE and Kering 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.