Correlation Between SANOK RUBBER and Koninklijke Ahold

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Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and Koninklijke Ahold 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 SANOK RUBBER and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on SANOK RUBBER and Koninklijke Ahold 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 SANOK RUBBER with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and Koninklijke Ahold.

Diversification Opportunities for SANOK RUBBER and Koninklijke Ahold

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between SANOK and Koninklijke is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and Koninklijke Ahold go up and down completely randomly.

Pair Corralation between SANOK RUBBER and Koninklijke Ahold

Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.79 times more return on investment than Koninklijke Ahold. However, SANOK RUBBER is 1.79 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.09 of its potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.04 per unit of risk. If you would invest  155.00  in SANOK RUBBER ZY on September 13, 2024 and sell it today you would earn a total of  296.00  from holding SANOK RUBBER ZY or generate 190.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.4%
ValuesDaily Returns

SANOK RUBBER ZY  vs.  Koninklijke Ahold Delhaize

 Performance 
       Timeline  
SANOK RUBBER ZY 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.
Koninklijke Ahold 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Koninklijke Ahold Delhaize are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Koninklijke Ahold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SANOK RUBBER and Koninklijke Ahold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SANOK RUBBER and Koninklijke Ahold

The main advantage of trading using opposite SANOK RUBBER and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.
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The idea behind SANOK RUBBER ZY and Koninklijke Ahold Delhaize 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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