Correlation Between Kesko Oyj and Ingles Markets

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

By analyzing existing cross correlation between Kesko Oyj ADR and Ingles Markets Incorporated, you can compare the effects of market volatilities on Kesko Oyj and Ingles Markets 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 Kesko Oyj with a short position of Ingles Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kesko Oyj and Ingles Markets.

Diversification Opportunities for Kesko Oyj and Ingles Markets

0.17

Correlation Coefficient

Kesko Oyj  Ingles Markets

Average diversification

The 3 months correlation between Kesko and Ingles is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kesko Oyj ADR and Ingles Markets Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingles Markets and Kesko Oyj 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 Kesko Oyj ADR are associated (or correlated) with Ingles Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingles Markets has no effect on the direction of Kesko Oyj i.e., Kesko Oyj and Ingles Markets go up and down completely randomly.

Pair Corralation between Kesko Oyj and Ingles Markets

Assuming the 90 days horizon Kesko Oyj ADR is expected to generate 0.88 times more return on investment than Ingles Markets. However, Kesko Oyj ADR is 1.14 times less risky than Ingles Markets. It trades about -0.06 of its potential returns per unit of risk. Ingles Markets Incorporated is currently generating about -0.05 per unit of risk. If you would invest  1,002  in Kesko Oyj ADR on September 20, 2024 and sell it today you would lose (80.00) from holding Kesko Oyj ADR or give up 7.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Kesko Oyj ADR  vs.  Ingles Markets Incorporated

Kesko Oyj ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kesko Oyj ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ingles Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingles Markets Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kesko Oyj and Ingles Markets

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

The idea behind Kesko Oyj ADR and Ingles Markets Incorporated 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.