Correlation Between KBC Ancora and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both KBC Ancora and Dairy Farm 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 KBC Ancora and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBC Ancora SCA and Dairy Farm International, you can compare the effects of market volatilities on KBC Ancora and Dairy Farm 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 KBC Ancora with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Ancora and Dairy Farm.
Diversification Opportunities for KBC Ancora and Dairy Farm
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between KBC and Dairy is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding KBC Ancora SCA and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and KBC Ancora 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 KBC Ancora SCA are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of KBC Ancora i.e., KBC Ancora and Dairy Farm go up and down completely randomly.
Pair Corralation between KBC Ancora and Dairy Farm
Assuming the 90 days horizon KBC Ancora SCA is expected to generate 0.54 times more return on investment than Dairy Farm. However, KBC Ancora SCA is 1.84 times less risky than Dairy Farm. It trades about 0.05 of its potential returns per unit of risk. Dairy Farm International is currently generating about 0.01 per unit of risk. If you would invest 3,445 in KBC Ancora SCA on September 5, 2024 and sell it today you would earn a total of 1,260 from holding KBC Ancora SCA or generate 36.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
KBC Ancora SCA vs. Dairy Farm International
Performance |
| Timeline |
| KBC Ancora SCA |
| Dairy Farm International |
KBC Ancora and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Ancora and Dairy Farm
The main advantage of trading using opposite KBC Ancora and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Ancora position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| KBC Ancora vs. TFS FINANCIAL | KBC Ancora vs. WisdomTree Investments | KBC Ancora vs. Virtus Investment Partners | KBC Ancora vs. SEI INVESTMENTS |
| Dairy Farm vs. Seven i Holdings | Dairy Farm vs. AHOLD DELHAIADR16 EO 25 | Dairy Farm vs. Loblaw Companies Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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