Correlation Between Koninklijke Heijmans and VGP NV
Can any of the company-specific risk be diversified away by investing in both Koninklijke Heijmans and VGP 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 VGP 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 VGP NV, you can compare the effects of market volatilities on Koninklijke Heijmans and VGP 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 VGP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Heijmans and VGP NV.
Diversification Opportunities for Koninklijke Heijmans and VGP NV
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koninklijke and VGP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Heijmans NV and VGP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGP 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 VGP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGP NV has no effect on the direction of Koninklijke Heijmans i.e., Koninklijke Heijmans and VGP NV go up and down completely randomly.
Pair Corralation between Koninklijke Heijmans and VGP NV
Assuming the 90 days trading horizon Koninklijke Heijmans NV is expected to generate 1.4 times more return on investment than VGP NV. However, Koninklijke Heijmans is 1.4 times more volatile than VGP NV. It trades about 0.16 of its potential returns per unit of risk. VGP NV is currently generating about -0.04 per unit of risk. If you would invest 1,177 in Koninklijke Heijmans NV on September 2, 2024 and sell it today you would earn a total of 1,723 from holding Koninklijke Heijmans NV or generate 146.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Heijmans NV vs. VGP NV
Performance |
| Timeline |
| Koninklijke Heijmans |
| VGP NV |
Koninklijke Heijmans and VGP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Heijmans and VGP NV
The main advantage of trading using opposite Koninklijke Heijmans and VGP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Heijmans position performs unexpectedly, VGP 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 VGP NV will offset losses from the drop in VGP 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 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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