Correlation Between Kerry Logistics and Destination

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

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

Diversification Opportunities for Kerry Logistics and Destination

0.23

Correlation Coefficient

Kerry Logistics  Destination

Modest diversification

The 3 months correlation between Kerry and Destination is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Logistics Network and Destination XL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destination XL Group and Kerry Logistics 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 Kerry Logistics Network are associated (or correlated) with Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destination XL Group has no effect on the direction of Kerry Logistics i.e., Kerry Logistics and Destination go up and down completely randomly.

Pair Corralation between Kerry Logistics and Destination

If you would invest  182.00  in Kerry Logistics Network on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Kerry Logistics Network or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Kerry Logistics Network  vs.  Destination XL Group

Kerry Logistics Network

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kerry Logistics Network has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kerry Logistics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Destination XL Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Destination XL Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kerry Logistics and Destination

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

The idea behind Kerry Logistics Network and Destination XL Group 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.