Correlation Between Twin Ridge and Kingfisher PLC

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

By analyzing existing cross correlation between Twin Ridge Capital and Kingfisher PLC ADR, you can compare the effects of market volatilities on Twin Ridge and Kingfisher PLC 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 Twin Ridge with a short position of Kingfisher PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twin Ridge and Kingfisher PLC.

Diversification Opportunities for Twin Ridge and Kingfisher PLC

0.0

Correlation Coefficient

Twin Ridge  Kingfisher PLC

Pay attention - limited upside

The 3 months correlation between Twin and Kingfisher is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Twin Ridge Capital and Kingfisher PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingfisher PLC ADR and Twin Ridge 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 Twin Ridge Capital are associated (or correlated) with Kingfisher PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingfisher PLC ADR has no effect on the direction of Twin Ridge i.e., Twin Ridge and Kingfisher PLC go up and down completely randomly.

Pair Corralation between Twin Ridge and Kingfisher PLC

If you would invest  610.00  in Kingfisher PLC ADR on December 29, 2024 and sell it today you would earn a total of  39.00  from holding Kingfisher PLC ADR or generate 6.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Twin Ridge Capital  vs.  Kingfisher PLC ADR

Twin Ridge Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Twin Ridge Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Twin Ridge is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kingfisher PLC ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfisher PLC ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical indicators, Kingfisher PLC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Twin Ridge and Kingfisher PLC

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

The idea behind Twin Ridge Capital and Kingfisher PLC ADR 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.