Correlation Between Ctac NV and Kendrion
Can any of the company-specific risk be diversified away by investing in both Ctac NV 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 Ctac NV and Kendrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ctac NV and Kendrion NV, you can compare the effects of market volatilities on Ctac NV 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 Ctac NV with a short position of Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ctac NV and Kendrion.
Diversification Opportunities for Ctac NV and Kendrion
Poor diversification
The 3 months correlation between Ctac and Kendrion is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ctac NV and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and Ctac 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 Ctac 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 Ctac NV i.e., Ctac NV and Kendrion go up and down completely randomly.
Pair Corralation between Ctac NV and Kendrion
Assuming the 90 days trading horizon Ctac NV is expected to under-perform the Kendrion. But the stock apears to be less risky and, when comparing its historical volatility, Ctac NV is 1.06 times less risky than Kendrion. The stock trades about -0.13 of its potential returns per unit of risk. The Kendrion NV is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,108 in Kendrion NV on August 27, 2024 and sell it today you would lose (18.00) from holding Kendrion NV or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ctac NV vs. Kendrion NV
Performance |
| Timeline |
| Ctac NV |
| Kendrion NV |
Ctac NV and Kendrion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ctac NV and Kendrion
The main advantage of trading using opposite Ctac NV and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ctac NV 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.| Ctac NV vs. NV Nederlandsche Apparatenfabriek | Ctac NV vs. Brunel International NV | Ctac NV vs. iShares SP 500 | Ctac NV vs. Hydratec 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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