Correlation Between Koninklijke Heijmans and Fugro NV
Can any of the company-specific risk be diversified away by investing in both Koninklijke Heijmans and Fugro NV 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 Koninklijke Heijmans and Fugro NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Heijmans NV and Fugro NV, you can compare the effects of market volatilities on Koninklijke Heijmans and Fugro NV 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 Koninklijke Heijmans with a short position of Fugro NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Heijmans and Fugro NV.
Diversification Opportunities for Koninklijke Heijmans and Fugro NV
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Koninklijke and Fugro is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Heijmans NV and Fugro NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fugro NV and Koninklijke Heijmans 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 Koninklijke Heijmans NV are associated (or correlated) with Fugro NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fugro NV has no effect on the direction of Koninklijke Heijmans i.e., Koninklijke Heijmans and Fugro NV go up and down completely randomly.
Pair Corralation between Koninklijke Heijmans and Fugro NV
Assuming the 90 days trading horizon Koninklijke Heijmans NV is expected to generate 0.89 times more return on investment than Fugro NV. However, Koninklijke Heijmans NV is 1.12 times less risky than Fugro NV. It trades about 0.12 of its potential returns per unit of risk. Fugro NV is currently generating about 0.02 per unit of risk. If you would invest 944.00 in Koninklijke Heijmans NV on August 25, 2024 and sell it today you would earn a total of 1,851 from holding Koninklijke Heijmans NV or generate 196.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Heijmans NV vs. Fugro NV
Performance |
| Timeline |
| Koninklijke Heijmans |
| Fugro NV |
Koninklijke Heijmans and Fugro NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Heijmans and Fugro NV
The main advantage of trading using opposite Koninklijke Heijmans and Fugro NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Heijmans position performs unexpectedly, Fugro NV 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 Fugro NV will offset losses from the drop in Fugro NV's long position.| Koninklijke Heijmans vs. Koninklijke BAM Groep | Koninklijke Heijmans vs. PostNL NV | Koninklijke Heijmans vs. ForFarmers NV | Koninklijke Heijmans vs. Flow Traders BV |
| Fugro NV vs. SBM Offshore NV | Fugro NV vs. Koninklijke BAM Groep | Fugro NV vs. PostNL NV | Fugro NV vs. Aegon 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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