Correlation Between KBC Ancora and BRF SA
Can any of the company-specific risk be diversified away by investing in both KBC Ancora and BRF SA 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 BRF SA 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 BRF SA, you can compare the effects of market volatilities on KBC Ancora and BRF SA 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 BRF SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Ancora and BRF SA.
Diversification Opportunities for KBC Ancora and BRF SA
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBC and BRF is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KBC Ancora SCA and BRF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRF SA 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 BRF SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRF SA has no effect on the direction of KBC Ancora i.e., KBC Ancora and BRF SA go up and down completely randomly.
Pair Corralation between KBC Ancora and BRF SA
Assuming the 90 days horizon KBC Ancora is expected to generate 3.5 times less return on investment than BRF SA. But when comparing it to its historical volatility, KBC Ancora SCA is 2.65 times less risky than BRF SA. It trades about 0.07 of its potential returns per unit of risk. BRF SA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 108.00 in BRF SA on October 29, 2024 and sell it today you would earn a total of 238.00 from holding BRF SA or generate 220.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Ancora SCA vs. BRF SA
Performance |
| Timeline |
| KBC Ancora SCA |
| BRF SA |
KBC Ancora and BRF SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Ancora and BRF SA
The main advantage of trading using opposite KBC Ancora and BRF SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Ancora position performs unexpectedly, BRF SA 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 BRF SA will offset losses from the drop in BRF SA's long position.| KBC Ancora vs. Blackstone Group | KBC Ancora vs. The Bank of | KBC Ancora vs. Ameriprise Financial | KBC Ancora vs. State Street |
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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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