Correlation Between KIMBERLY and Hawkins

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

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

Diversification Opportunities for KIMBERLY and Hawkins

-0.25

Correlation Coefficient

KIMBERLY  Hawkins

Very good diversification

The 3 months correlation between KIMBERLY and Hawkins is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding KIMBERLY CLARK P and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins and KIMBERLY 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 P are associated (or correlated) with Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of KIMBERLY i.e., KIMBERLY and Hawkins go up and down completely randomly.

Pair Corralation between KIMBERLY and Hawkins

Assuming the 90 days trading horizon KIMBERLY CLARK P is expected to under-perform the Hawkins. But the bond apears to be less risky and, when comparing its historical volatility, KIMBERLY CLARK P is 2.39 times less risky than Hawkins. The bond trades about -0.21 of its potential returns per unit of risk. The Hawkins is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  11,755  in Hawkins on September 15, 2024 and sell it today you would earn a total of  1,232  from holding Hawkins or generate 10.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	54.69%
Values	Daily Returns

KIMBERLY CLARK P  vs.  Hawkins

KIMBERLY CLARK P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIMBERLY CLARK P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators 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 KIMBERLY CLARK P investors.

Hawkins

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Hawkins may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with KIMBERLY and Hawkins

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

The idea behind KIMBERLY CLARK P and Hawkins 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.