Correlation Between KBC Ancora and Roche Holding
Can any of the company-specific risk be diversified away by investing in both KBC Ancora and Roche Holding 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 Roche Holding 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 Roche Holding Ltd, you can compare the effects of market volatilities on KBC Ancora and Roche Holding 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 Roche Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Ancora and Roche Holding.
Diversification Opportunities for KBC Ancora and Roche Holding
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBC and Roche is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding KBC Ancora SCA and Roche Holding Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roche Holding 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 Roche Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roche Holding has no effect on the direction of KBC Ancora i.e., KBC Ancora and Roche Holding go up and down completely randomly.
Pair Corralation between KBC Ancora and Roche Holding
Assuming the 90 days horizon KBC Ancora SCA is expected to generate 0.7 times more return on investment than Roche Holding. However, KBC Ancora SCA is 1.42 times less risky than Roche Holding. It trades about 0.1 of its potential returns per unit of risk. Roche Holding Ltd is currently generating about 0.04 per unit of risk. If you would invest 3,339 in KBC Ancora SCA on August 25, 2024 and sell it today you would earn a total of 1,351 from holding KBC Ancora SCA or generate 40.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
KBC Ancora SCA vs. Roche Holding Ltd
Performance |
| Timeline |
| KBC Ancora SCA |
| Roche Holding |
KBC Ancora and Roche Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Ancora and Roche Holding
The main advantage of trading using opposite KBC Ancora and Roche Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Ancora position performs unexpectedly, Roche Holding 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 Roche Holding will offset losses from the drop in Roche Holding's long position.| KBC Ancora vs. The Bank of | KBC Ancora vs. Ares Management Corp | KBC Ancora vs. Superior Plus Corp | KBC Ancora vs. NMI Holdings |
| Roche Holding vs. Johnson Johnson | Roche Holding vs. Merck Co | Roche Holding vs. Amgen Inc | Roche Holding vs. Bayer AG NA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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