Correlation Between Koninklijke BAM and Sligro Food
Can any of the company-specific risk be diversified away by investing in both Koninklijke BAM and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on Koninklijke BAM and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke BAM and Sligro Food.
Diversification Opportunities for Koninklijke BAM and Sligro Food
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koninklijke and Sligro is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke BAM Groep and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Koninklijke BAM i.e., Koninklijke BAM and Sligro Food go up and down completely randomly.
Pair Corralation between Koninklijke BAM and Sligro Food
Assuming the 90 days trading horizon Koninklijke BAM Groep is expected to under-perform the Sligro Food. In addition to that, Koninklijke BAM is 1.37 times more volatile than Sligro Food Group. It trades about -0.37 of its total potential returns per unit of risk. Sligro Food Group is currently generating about -0.39 per unit of volatility. If you would invest 1,180 in Sligro Food Group on August 29, 2024 and sell it today you would lose (100.00) from holding Sligro Food Group or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke BAM Groep vs. Sligro Food Group
Performance |
| Timeline |
| Koninklijke BAM Groep |
| Sligro Food Group |
Koninklijke BAM and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke BAM and Sligro Food
The main advantage of trading using opposite Koninklijke BAM and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke BAM position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| Koninklijke BAM vs. Fugro NV | Koninklijke BAM vs. SBM Offshore NV | Koninklijke BAM vs. Aegon NV | Koninklijke BAM vs. PostNL NV |
| Sligro Food vs. Unilever PLC | Sligro Food vs. Koninklijke Philips NV | Sligro Food vs. NN Group NV | Sligro Food 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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