Correlation Between Brunel International and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Brunel International and Koninklijke Ahold 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 Brunel International and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunel International NV and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Brunel International and Koninklijke Ahold 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 Brunel International with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunel International and Koninklijke Ahold.
Diversification Opportunities for Brunel International and Koninklijke Ahold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brunel and Koninklijke is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Brunel International NV and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Brunel International 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 Brunel International NV are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Brunel International i.e., Brunel International and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Brunel International and Koninklijke Ahold
Assuming the 90 days trading horizon Brunel International NV is expected to under-perform the Koninklijke Ahold. In addition to that, Brunel International is 1.71 times more volatile than Koninklijke Ahold Delhaize. It trades about -0.02 of its total potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.14 per unit of volatility. If you would invest 2,629 in Koninklijke Ahold Delhaize on September 3, 2024 and sell it today you would earn a total of 636.00 from holding Koninklijke Ahold Delhaize or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunel International NV vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Brunel International |
| Koninklijke Ahold |
Brunel International and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunel International and Koninklijke Ahold
The main advantage of trading using opposite Brunel International and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunel International position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Brunel International vs. Koninklijke BAM Groep | Brunel International vs. TKH Group NV | Brunel International vs. Fugro NV | Brunel International vs. Aalberts Industries NV |
| Koninklijke Ahold vs. Unilever PLC | Koninklijke Ahold vs. Koninklijke Philips NV | Koninklijke Ahold vs. NN Group NV | Koninklijke Ahold 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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