Correlation Between ASM International and Koninklijke KPN
Can any of the company-specific risk be diversified away by investing in both ASM International and Koninklijke KPN 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 ASM International and Koninklijke KPN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM International NV and Koninklijke KPN NV, you can compare the effects of market volatilities on ASM International and Koninklijke KPN 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 ASM International with a short position of Koninklijke KPN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM International and Koninklijke KPN.
Diversification Opportunities for ASM International and Koninklijke KPN
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ASM and Koninklijke is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV and Koninklijke KPN NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke KPN NV and ASM International 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 ASM International NV are associated (or correlated) with Koninklijke KPN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke KPN NV has no effect on the direction of ASM International i.e., ASM International and Koninklijke KPN go up and down completely randomly.
Pair Corralation between ASM International and Koninklijke KPN
Assuming the 90 days trading horizon ASM International NV is expected to generate 1.9 times more return on investment than Koninklijke KPN. However, ASM International is 1.9 times more volatile than Koninklijke KPN NV. It trades about 0.03 of its potential returns per unit of risk. Koninklijke KPN NV is currently generating about 0.05 per unit of risk. If you would invest 52,400 in ASM International NV on September 13, 2024 and sell it today you would earn a total of 440.00 from holding ASM International NV or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM International NV vs. Koninklijke KPN NV
Performance |
| Timeline |
| ASM International |
| Koninklijke KPN NV |
ASM International and Koninklijke KPN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM International and Koninklijke KPN
The main advantage of trading using opposite ASM International and Koninklijke KPN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM International position performs unexpectedly, Koninklijke KPN 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 KPN will offset losses from the drop in Koninklijke KPN's long position.| ASM International vs. BE Semiconductor Industries | ASM International vs. ASML Holding NV | ASM International vs. NN Group NV | ASM International vs. Aalberts Industries NV |
| Koninklijke KPN vs. Aegon NV | Koninklijke KPN vs. Koninklijke Philips NV | Koninklijke KPN vs. Randstad NV | Koninklijke KPN vs. Akzo Nobel 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |