Correlation Between Qed Connect and Kerry Group

Can any of the company-specific risk be diversified away by investing in both Qed Connect and Kerry Group 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 Qed Connect and Kerry Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qed Connect and Kerry Group PLC, you can compare the effects of market volatilities on Qed Connect and Kerry Group 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 Qed Connect with a short position of Kerry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qed Connect and Kerry Group.

Diversification Opportunities for Qed Connect and Kerry Group

0.68

Correlation Coefficient

Qed Connect  Kerry Group

Poor diversification

The 3 months correlation between Qed and Kerry is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Qed Connect and Kerry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Group PLC and Qed Connect 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 Qed Connect are associated (or correlated) with Kerry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Group PLC has no effect on the direction of Qed Connect i.e., Qed Connect and Kerry Group go up and down completely randomly.

Pair Corralation between Qed Connect and Kerry Group

Given the investment horizon of 90 days Qed Connect is expected to generate 8.05 times more return on investment than Kerry Group. However, Qed Connect is 8.05 times more volatile than Kerry Group PLC. It trades about 0.03 of its potential returns per unit of risk. Kerry Group PLC is currently generating about 0.1 per unit of risk. If you would invest  0.05  in Qed Connect on September 23, 2024 and sell it today you would lose (0.02) from holding Qed Connect or give up 40.0% of portfolio value over 90 days.

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

Qed Connect  vs.  Kerry Group PLC

Qed Connect

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qed Connect has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Kerry Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kerry Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kerry Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Qed Connect and Kerry Group

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

The idea behind Qed Connect and Kerry Group PLC 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.