Correlation Between Albertsons Companies and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies 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 Albertsons Companies and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Albertsons Companies 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 Albertsons Companies with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Koninklijke Ahold.
Diversification Opportunities for Albertsons Companies and Koninklijke Ahold
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Albertsons and Koninklijke is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Albertsons Companies 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 Albertsons Companies 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 Albertsons Companies i.e., Albertsons Companies and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Albertsons Companies and Koninklijke Ahold
Considering the 90-day investment horizon Albertsons Companies is expected to generate 2.68 times less return on investment than Koninklijke Ahold. But when comparing it to its historical volatility, Albertsons Companies is 1.58 times less risky than Koninklijke Ahold. It trades about 0.11 of its potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,240 in Koninklijke Ahold Delhaize on November 3, 2024 and sell it today you would earn a total of 247.00 from holding Koninklijke Ahold Delhaize or generate 7.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Albertsons Companies |
| Koninklijke Ahold |
Albertsons Companies and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Koninklijke Ahold
The main advantage of trading using opposite Albertsons Companies and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies 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.| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
| Koninklijke Ahold vs. Weis Markets | Koninklijke Ahold vs. Albertsons Companies | Koninklijke Ahold vs. Dingdong ADR | Koninklijke Ahold vs. Natural Grocers by |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |