Correlation Between Kimberly Clark and Genomma Lab

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

By analyzing existing cross correlation between Kimberly Clark de Mxico and Genomma Lab Internacional, you can compare the effects of market volatilities on Kimberly Clark and Genomma Lab 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 Kimberly Clark with a short position of Genomma Lab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimberly Clark and Genomma Lab.

Diversification Opportunities for Kimberly Clark and Genomma Lab

-0.87

Correlation Coefficient

Kimberly Clark  Genomma Lab

Pay attention - limited upside

The 3 months correlation between Kimberly and Genomma is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kimberly Clark de Mxico and Genomma Lab Internacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genomma Lab Internacional and Kimberly Clark 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 Kimberly Clark de Mxico are associated (or correlated) with Genomma Lab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genomma Lab Internacional has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and Genomma Lab go up and down completely randomly.

Pair Corralation between Kimberly Clark and Genomma Lab

Assuming the 90 days trading horizon Kimberly Clark de Mxico is expected to under-perform the Genomma Lab. But the stock apears to be less risky and, when comparing its historical volatility, Kimberly Clark de Mxico is 1.58 times less risky than Genomma Lab. The stock trades about -0.11 of its potential returns per unit of risk. The Genomma Lab Internacional is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,685  in Genomma Lab Internacional on September 2, 2024 and sell it today you would earn a total of  1,032  from holding Genomma Lab Internacional or generate 61.25% return on investment over 90 days.

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

Kimberly Clark de Mxico  vs.  Genomma Lab Internacional

Kimberly Clark de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kimberly Clark de Mxico 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 fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Genomma Lab Internacional

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genomma Lab Internacional are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Genomma Lab showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kimberly Clark and Genomma Lab

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

The idea behind Kimberly Clark de Mxico and Genomma Lab Internacional 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.