Correlation Between Koninklijke Ahold and CTP NV
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and CTP NV 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 Koninklijke Ahold and CTP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and CTP NV, you can compare the effects of market volatilities on Koninklijke Ahold and CTP NV 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 Koninklijke Ahold with a short position of CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and CTP NV.
Diversification Opportunities for Koninklijke Ahold and CTP NV
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Koninklijke and CTP is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and CTP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV and Koninklijke Ahold 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 Koninklijke Ahold Delhaize are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and CTP NV go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and CTP NV
Assuming the 90 days horizon Koninklijke Ahold Delhaize is expected to generate 0.85 times more return on investment than CTP NV. However, Koninklijke Ahold Delhaize is 1.18 times less risky than CTP NV. It trades about 0.11 of its potential returns per unit of risk. CTP NV is currently generating about -0.13 per unit of risk. If you would invest 3,103 in Koninklijke Ahold Delhaize on August 31, 2024 and sell it today you would earn a total of 165.00 from holding Koninklijke Ahold Delhaize or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. CTP NV
Performance |
| Timeline |
| Koninklijke Ahold |
| CTP NV |
Koninklijke Ahold and CTP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and CTP NV
The main advantage of trading using opposite Koninklijke Ahold and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, CTP NV 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 CTP NV will offset losses from the drop in CTP NV's long position.| Koninklijke Ahold vs. Unilever PLC | Koninklijke Ahold vs. Koninklijke Philips NV | Koninklijke Ahold vs. NN Group NV | Koninklijke Ahold vs. ING Groep NV |
| CTP NV vs. Warehouses de Pauw | CTP NV vs. VGP NV | CTP NV vs. Eurocommercial Properties NV | CTP NV vs. Koninklijke Heijmans NV |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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