Correlation Between Brunel International and Kendrion
Can any of the company-specific risk be diversified away by investing in both Brunel International and Kendrion 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 Kendrion 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 Kendrion NV, you can compare the effects of market volatilities on Brunel International and Kendrion 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 Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunel International and Kendrion.
Diversification Opportunities for Brunel International and Kendrion
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brunel and Kendrion is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Brunel International NV and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV 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 Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of Brunel International i.e., Brunel International and Kendrion go up and down completely randomly.
Pair Corralation between Brunel International and Kendrion
Assuming the 90 days trading horizon Brunel International NV is expected to generate 0.88 times more return on investment than Kendrion. However, Brunel International NV is 1.13 times less risky than Kendrion. It trades about 0.0 of its potential returns per unit of risk. Kendrion NV is currently generating about -0.03 per unit of risk. If you would invest 888.00 in Brunel International NV on August 24, 2024 and sell it today you would lose (48.00) from holding Brunel International NV or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunel International NV vs. Kendrion NV
Performance |
| Timeline |
| Brunel International |
| Kendrion NV |
Brunel International and Kendrion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunel International and Kendrion
The main advantage of trading using opposite Brunel International and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunel International position performs unexpectedly, Kendrion 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 Kendrion will offset losses from the drop in Kendrion'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 |
| Kendrion vs. TKH Group NV | Kendrion vs. NV Nederlandsche Apparatenfabriek | Kendrion vs. Brunel International NV | Kendrion vs. Aalberts Industries 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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