Correlation Between Koninklijke Ahold and Ease2pay
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and Ease2pay 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 Ease2pay 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 Ease2pay NV, you can compare the effects of market volatilities on Koninklijke Ahold and Ease2pay 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 Ease2pay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and Ease2pay.
Diversification Opportunities for Koninklijke Ahold and Ease2pay
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koninklijke and Ease2pay is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and Ease2pay NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ease2pay 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 Ease2pay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ease2pay NV has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and Ease2pay go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and Ease2pay
Assuming the 90 days horizon Koninklijke Ahold Delhaize is expected to generate 0.22 times more return on investment than Ease2pay. However, Koninklijke Ahold Delhaize is 4.59 times less risky than Ease2pay. It trades about 0.1 of its potential returns per unit of risk. Ease2pay NV is currently generating about -0.03 per unit of risk. If you would invest 2,857 in Koninklijke Ahold Delhaize on August 24, 2024 and sell it today you would earn a total of 374.00 from holding Koninklijke Ahold Delhaize or generate 13.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. Ease2pay NV
Performance |
| Timeline |
| Koninklijke Ahold |
| Ease2pay NV |
Koninklijke Ahold and Ease2pay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and Ease2pay
The main advantage of trading using opposite Koninklijke Ahold and Ease2pay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, Ease2pay 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 Ease2pay will offset losses from the drop in Ease2pay'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 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |