Correlation Between Groep Brussel and KBC Groep
Can any of the company-specific risk be diversified away by investing in both Groep Brussel and KBC Groep 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 Groep Brussel and KBC Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groep Brussel Lambert and KBC Groep NV, you can compare the effects of market volatilities on Groep Brussel and KBC Groep 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 Groep Brussel with a short position of KBC Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and KBC Groep.
Diversification Opportunities for Groep Brussel and KBC Groep
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Groep and KBC is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and KBC Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Groep NV and Groep Brussel 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 Groep Brussel Lambert are associated (or correlated) with KBC Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Groep NV has no effect on the direction of Groep Brussel i.e., Groep Brussel and KBC Groep go up and down completely randomly.
Pair Corralation between Groep Brussel and KBC Groep
Assuming the 90 days trading horizon Groep Brussel Lambert is expected to under-perform the KBC Groep. But the stock apears to be less risky and, when comparing its historical volatility, Groep Brussel Lambert is 1.16 times less risky than KBC Groep. The stock trades about -0.15 of its potential returns per unit of risk. The KBC Groep NV is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,660 in KBC Groep NV on August 26, 2024 and sell it today you would earn a total of 210.00 from holding KBC Groep NV or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groep Brussel Lambert vs. KBC Groep NV
Performance |
| Timeline |
| Groep Brussel Lambert |
| KBC Groep NV |
Groep Brussel and KBC Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groep Brussel and KBC Groep
The main advantage of trading using opposite Groep Brussel and KBC Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groep Brussel position performs unexpectedly, KBC Groep 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 KBC Groep will offset losses from the drop in KBC Groep's long position.| Groep Brussel vs. Ackermans Van Haaren | Groep Brussel vs. Sofina Socit Anonyme | Groep Brussel vs. ageas SANV | Groep Brussel vs. Solvay SA |
| KBC Groep vs. ageas SANV | KBC Groep vs. Solvay SA | KBC Groep vs. Etablissementen Franz Colruyt | KBC Groep vs. Groep Brussel Lambert |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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