Correlation Between Basic Fit and PostNL NV
Can any of the company-specific risk be diversified away by investing in both Basic Fit and PostNL NV 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 Basic Fit and PostNL NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Basic Fit NV and PostNL NV, you can compare the effects of market volatilities on Basic Fit and PostNL NV 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 Basic Fit with a short position of PostNL NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Basic Fit and PostNL NV.
Diversification Opportunities for Basic Fit and PostNL NV
Good diversification
The 3 months correlation between Basic and PostNL is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Basic Fit NV and PostNL NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PostNL NV and Basic Fit 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 Basic Fit NV are associated (or correlated) with PostNL NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PostNL NV has no effect on the direction of Basic Fit i.e., Basic Fit and PostNL NV go up and down completely randomly.
Pair Corralation between Basic Fit and PostNL NV
Assuming the 90 days trading horizon Basic Fit is expected to generate 4.08 times less return on investment than PostNL NV. In addition to that, Basic Fit is 1.85 times more volatile than PostNL NV. It trades about 0.07 of its total potential returns per unit of risk. PostNL NV is currently generating about 0.5 per unit of volatility. If you would invest 94.00 in PostNL NV on November 27, 2024 and sell it today you would earn a total of 14.00 from holding PostNL NV or generate 14.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Basic Fit NV vs. PostNL NV
Performance |
| Timeline |
| Basic Fit NV |
| PostNL NV |
Basic Fit and PostNL NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Basic Fit and PostNL NV
The main advantage of trading using opposite Basic Fit and PostNL NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Basic Fit position performs unexpectedly, PostNL NV 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 PostNL NV will offset losses from the drop in PostNL NV's long position.| Basic Fit vs. Alfen Beheer BV | Basic Fit vs. Just Eat Takeaway | Basic Fit vs. Kinepolis Group NV | Basic Fit vs. Galapagos NV |
| PostNL NV vs. Koninklijke Ahold Delhaize | PostNL NV vs. Bpost NV | PostNL NV vs. Aegon NV | PostNL NV vs. Koninklijke KPN 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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