Correlation Between KBC Groep and KBC Ancora
Can any of the company-specific risk be diversified away by investing in both KBC Groep and KBC Ancora 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 KBC Ancora 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 KBC Ancora, you can compare the effects of market volatilities on KBC Groep and KBC Ancora 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 KBC Ancora. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and KBC Ancora.
Diversification Opportunities for KBC Groep and KBC Ancora
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KBC and KBC is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and KBC Ancora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora 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 KBC Ancora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Ancora has no effect on the direction of KBC Groep i.e., KBC Groep and KBC Ancora go up and down completely randomly.
Pair Corralation between KBC Groep and KBC Ancora
Assuming the 90 days trading horizon KBC Groep is expected to generate 1.04 times less return on investment than KBC Ancora. In addition to that, KBC Groep is 1.2 times more volatile than KBC Ancora. It trades about 0.11 of its total potential returns per unit of risk. KBC Ancora is currently generating about 0.14 per unit of volatility. If you would invest 3,632 in KBC Ancora on November 3, 2024 and sell it today you would earn a total of 1,578 from holding KBC Ancora or generate 43.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
KBC Groep NV vs. KBC Ancora
Performance |
| Timeline |
| KBC Groep NV |
| KBC Ancora |
KBC Groep and KBC Ancora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Groep and KBC Ancora
The main advantage of trading using opposite KBC Groep and KBC Ancora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep position performs unexpectedly, KBC Ancora 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 KBC Ancora will offset losses from the drop in KBC Ancora'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 |
| KBC Ancora vs. KBC Groep NV | KBC Ancora vs. ageas SANV | KBC Ancora vs. Groep Brussel Lambert | KBC Ancora vs. Ackermans Van Haaren |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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