Correlation Between Kimberly Clark and Balco Group

Can any of the company-specific risk be diversified away by investing in both Kimberly Clark and Balco 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 Kimberly Clark and Balco Group 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 Balco Group AB, you can compare the effects of market volatilities on Kimberly Clark and Balco 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 Kimberly Clark with a short position of Balco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimberly Clark and Balco Group.

Diversification Opportunities for Kimberly Clark and Balco Group

-0.31

Correlation Coefficient

Kimberly Clark  Balco Group

Very good diversification

The 3 months correlation between Kimberly and Balco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kimberly Clark de Mxico and Balco Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balco Group AB 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 Balco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balco Group AB has no effect on the direction of Kimberly Clark i.e., Kimberly Clark and Balco Group go up and down completely randomly.

Pair Corralation between Kimberly Clark and Balco Group

Assuming the 90 days trading horizon Kimberly Clark de Mxico is expected to generate 0.48 times more return on investment than Balco Group. However, Kimberly Clark de Mxico is 2.1 times less risky than Balco Group. It trades about 0.07 of its potential returns per unit of risk. Balco Group AB is currently generating about -0.06 per unit of risk. If you would invest  3,351  in Kimberly Clark de Mxico on April 25, 2025 and sell it today you would earn a total of  178.00  from holding Kimberly Clark de Mxico or generate 5.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Kimberly Clark de Mxico  vs.  Balco Group AB

Kimberly Clark de

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kimberly Clark de Mxico are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Kimberly Clark is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Balco Group AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Balco Group AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Kimberly Clark and Balco Group

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

The idea behind Kimberly Clark de Mxico and Balco Group AB 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.