Correlation Between KBC Groep and GIMV NV
Can any of the company-specific risk be diversified away by investing in both KBC Groep and GIMV 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 KBC Groep and GIMV NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBC Groep NV and GIMV NV, you can compare the effects of market volatilities on KBC Groep and GIMV 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 KBC Groep with a short position of GIMV NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and GIMV NV.
Diversification Opportunities for KBC Groep and GIMV NV
Significant diversification
The 3 months correlation between KBC and GIMV is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and GIMV NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIMV NV and KBC Groep 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 Groep NV are associated (or correlated) with GIMV NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIMV NV has no effect on the direction of KBC Groep i.e., KBC Groep and GIMV NV go up and down completely randomly.
Pair Corralation between KBC Groep and GIMV NV
Assuming the 90 days trading horizon KBC Groep NV is expected to generate 1.28 times more return on investment than GIMV NV. However, KBC Groep is 1.28 times more volatile than GIMV NV. It trades about 0.05 of its potential returns per unit of risk. GIMV NV is currently generating about 0.01 per unit of risk. If you would invest 4,891 in KBC Groep NV on August 30, 2024 and sell it today you would earn a total of 1,859 from holding KBC Groep NV or generate 38.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Groep NV vs. GIMV NV
Performance |
| Timeline |
| KBC Groep NV |
| GIMV NV |
KBC Groep and GIMV NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Groep and GIMV NV
The main advantage of trading using opposite KBC Groep and GIMV NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep position performs unexpectedly, GIMV 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 GIMV NV will offset losses from the drop in GIMV NV's long position.| KBC Groep vs. ageas SANV | KBC Groep vs. Solvay SA | KBC Groep vs. Etablissementen Franz Colruyt | KBC Groep vs. Groep Brussel Lambert |
| GIMV NV vs. Groep Brussel Lambert | GIMV NV vs. Ackermans Van Haaren | GIMV NV vs. Sofina Socit Anonyme | GIMV NV vs. Brederode SA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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