Correlation Between Coles and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Coles 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 Coles and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coles Group and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Coles 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 Coles with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coles and Koninklijke Ahold.
Diversification Opportunities for Coles and Koninklijke Ahold
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coles and Koninklijke is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Coles Group and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Coles 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 Coles Group 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 Coles i.e., Coles and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Coles and Koninklijke Ahold
If you would invest 3,260 in Koninklijke Ahold Delhaize on August 28, 2024 and sell it today you would earn a total of 96.00 from holding Koninklijke Ahold Delhaize or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Coles Group vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Coles Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Koninklijke Ahold |
Coles and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coles and Koninklijke Ahold
The main advantage of trading using opposite Coles and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coles 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.| Coles vs. Seven i Holdings | Coles vs. Grocery Outlet Holding | Coles vs. Krispy Kreme | Coles vs. Koninklijke Ahold Delhaize |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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