Correlation Between Koninklijke BAM and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Koninklijke BAM and Vastned Retail 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 Vastned Retail 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 Vastned Retail NV, you can compare the effects of market volatilities on Koninklijke BAM and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke BAM and Vastned Retail.
Diversification Opportunities for Koninklijke BAM and Vastned Retail
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Koninklijke and Vastned is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke BAM Groep and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Koninklijke BAM i.e., Koninklijke BAM and Vastned Retail go up and down completely randomly.
Pair Corralation between Koninklijke BAM and Vastned Retail
Assuming the 90 days trading horizon Koninklijke BAM Groep is expected to generate 1.71 times more return on investment than Vastned Retail. However, Koninklijke BAM is 1.71 times more volatile than Vastned Retail NV. It trades about 0.08 of its potential returns per unit of risk. Vastned Retail NV is currently generating about 0.03 per unit of risk. If you would invest 376.00 in Koninklijke BAM Groep on September 2, 2024 and sell it today you would earn a total of 30.00 from holding Koninklijke BAM Groep or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke BAM Groep vs. Vastned Retail NV
Performance |
| Timeline |
| Koninklijke BAM Groep |
| Vastned Retail NV |
Koninklijke BAM and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke BAM and Vastned Retail
The main advantage of trading using opposite Koninklijke BAM and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke BAM position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Koninklijke BAM vs. PostNL NV | Koninklijke BAM vs. ForFarmers NV | Koninklijke BAM vs. Flow Traders BV | Koninklijke BAM vs. ASR Nederland NV |
| Vastned Retail vs. Wereldhave NV | Vastned Retail vs. Eurocommercial Properties NV | Vastned Retail vs. NSI NV | Vastned Retail vs. Sligro Food Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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