Correlation Between Focus Home and KBC Ancora
Can any of the company-specific risk be diversified away by investing in both Focus Home and KBC Ancora 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 Focus Home and KBC Ancora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and KBC Ancora SCA, you can compare the effects of market volatilities on Focus Home and KBC Ancora 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 Focus Home with a short position of KBC Ancora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and KBC Ancora.
Diversification Opportunities for Focus Home and KBC Ancora
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Focus and KBC is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and KBC Ancora SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora SCA and Focus Home 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 Focus Home Interactive are associated (or correlated) with KBC Ancora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Ancora SCA has no effect on the direction of Focus Home i.e., Focus Home and KBC Ancora go up and down completely randomly.
Pair Corralation between Focus Home and KBC Ancora
Assuming the 90 days horizon Focus Home Interactive is expected to under-perform the KBC Ancora. In addition to that, Focus Home is 3.84 times more volatile than KBC Ancora SCA. It trades about -0.28 of its total potential returns per unit of risk. KBC Ancora SCA is currently generating about -0.1 per unit of volatility. If you would invest 5,170 in KBC Ancora SCA on November 6, 2024 and sell it today you would lose (80.00) from holding KBC Ancora SCA or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. KBC Ancora SCA
Performance |
| Timeline |
| Focus Home Interactive |
| KBC Ancora SCA |
Focus Home and KBC Ancora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and KBC Ancora
The main advantage of trading using opposite Focus Home and KBC Ancora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, KBC Ancora 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 KBC Ancora will offset losses from the drop in KBC Ancora's long position.| Focus Home vs. TERADATA | Focus Home vs. H2O Retailing | Focus Home vs. Alliance Data Systems | Focus Home vs. Cleanaway Waste Management |
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Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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