Correlation Between Ease2pay and Kendrion
Can any of the company-specific risk be diversified away by investing in both Ease2pay 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 Ease2pay and Kendrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ease2pay NV and Kendrion NV, you can compare the effects of market volatilities on Ease2pay 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 Ease2pay with a short position of Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ease2pay and Kendrion.
Diversification Opportunities for Ease2pay and Kendrion
Poor diversification
The 3 months correlation between Ease2pay and Kendrion is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ease2pay NV and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and Ease2pay 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 Ease2pay 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 Ease2pay i.e., Ease2pay and Kendrion go up and down completely randomly.
Pair Corralation between Ease2pay and Kendrion
Assuming the 90 days trading horizon Ease2pay NV is expected to under-perform the Kendrion. In addition to that, Ease2pay is 2.65 times more volatile than Kendrion NV. It trades about -0.03 of its total potential returns per unit of risk. Kendrion NV is currently generating about -0.02 per unit of volatility. If you would invest 1,388 in Kendrion NV on August 28, 2024 and sell it today you would lose (292.00) from holding Kendrion NV or give up 21.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Ease2pay NV vs. Kendrion NV
Performance |
| Timeline |
| Ease2pay NV |
| Kendrion NV |
Ease2pay and Kendrion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ease2pay and Kendrion
The main advantage of trading using opposite Ease2pay and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ease2pay 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.| Ease2pay vs. Ctac NV | Ease2pay vs. Kendrion NV | Ease2pay vs. NV Nederlandsche Apparatenfabriek | Ease2pay vs. iShares SP 500 |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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