Correlation Between Barco NV and Kinepolis Group
Can any of the company-specific risk be diversified away by investing in both Barco NV and Kinepolis Group 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 Barco NV and Kinepolis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barco NV and Kinepolis Group NV, you can compare the effects of market volatilities on Barco NV and Kinepolis Group 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 Barco NV with a short position of Kinepolis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barco NV and Kinepolis Group.
Diversification Opportunities for Barco NV and Kinepolis Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barco and Kinepolis is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Barco NV and Kinepolis Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinepolis Group NV and Barco NV 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 Barco NV are associated (or correlated) with Kinepolis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinepolis Group NV has no effect on the direction of Barco NV i.e., Barco NV and Kinepolis Group go up and down completely randomly.
Pair Corralation between Barco NV and Kinepolis Group
Assuming the 90 days trading horizon Barco NV is expected to under-perform the Kinepolis Group. In addition to that, Barco NV is 1.36 times more volatile than Kinepolis Group NV. It trades about -0.07 of its total potential returns per unit of risk. Kinepolis Group NV is currently generating about 0.0 per unit of volatility. If you would invest 3,957 in Kinepolis Group NV on August 27, 2024 and sell it today you would lose (137.00) from holding Kinepolis Group NV or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barco NV vs. Kinepolis Group NV
Performance |
| Timeline |
| Barco NV |
| Kinepolis Group NV |
Barco NV and Kinepolis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barco NV and Kinepolis Group
The main advantage of trading using opposite Barco NV and Kinepolis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barco NV position performs unexpectedly, Kinepolis Group 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 Kinepolis Group will offset losses from the drop in Kinepolis Group's long position.| Barco NV vs. Kinepolis Group NV | Barco NV vs. ageas SANV | Barco NV vs. Ackermans Van Haaren | Barco NV vs. Solvay SA |
| Kinepolis Group vs. Retail Estates | Kinepolis Group vs. Onward Medical NV | Kinepolis Group vs. Home Invest Belgium | Kinepolis Group vs. EVS Broadcast Equipment |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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