Correlation Between Koninklijke BAM and BenevolentAI
Can any of the company-specific risk be diversified away by investing in both Koninklijke BAM and BenevolentAI 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 BAM and BenevolentAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke BAM Groep and BenevolentAI SA, you can compare the effects of market volatilities on Koninklijke BAM and BenevolentAI 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 BAM with a short position of BenevolentAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke BAM and BenevolentAI.
Diversification Opportunities for Koninklijke BAM and BenevolentAI
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Koninklijke and BenevolentAI is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke BAM Groep and BenevolentAI SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BenevolentAI SA and Koninklijke BAM 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 BAM Groep are associated (or correlated) with BenevolentAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BenevolentAI SA has no effect on the direction of Koninklijke BAM i.e., Koninklijke BAM and BenevolentAI go up and down completely randomly.
Pair Corralation between Koninklijke BAM and BenevolentAI
Assuming the 90 days trading horizon Koninklijke BAM Groep is expected to generate 0.28 times more return on investment than BenevolentAI. However, Koninklijke BAM Groep is 3.64 times less risky than BenevolentAI. It trades about 0.08 of its potential returns per unit of risk. BenevolentAI SA is currently generating about -0.02 per unit of risk. If you would invest 198.00 in Koninklijke BAM Groep on August 24, 2024 and sell it today you would earn a total of 203.00 from holding Koninklijke BAM Groep or generate 102.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke BAM Groep vs. BenevolentAI SA
Performance |
| Timeline |
| Koninklijke BAM Groep |
| BenevolentAI SA |
Koninklijke BAM and BenevolentAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke BAM and BenevolentAI
The main advantage of trading using opposite Koninklijke BAM and BenevolentAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke BAM position performs unexpectedly, BenevolentAI 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 BenevolentAI will offset losses from the drop in BenevolentAI's long position.| Koninklijke BAM vs. Fugro NV | Koninklijke BAM vs. SBM Offshore NV | Koninklijke BAM vs. Aegon NV | Koninklijke BAM vs. PostNL NV |
| BenevolentAI vs. Galapagos NV | BenevolentAI vs. Koninklijke BAM Groep | BenevolentAI vs. Fugro NV | BenevolentAI vs. PostNL 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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