Correlation Between KBC Groep and Proximus
Can any of the company-specific risk be diversified away by investing in both KBC Groep and Proximus 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 Proximus 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 Proximus NV, you can compare the effects of market volatilities on KBC Groep and Proximus 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 Proximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and Proximus.
Diversification Opportunities for KBC Groep and Proximus
Weak diversification
The 3 months correlation between KBC and Proximus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and Proximus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximus 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 Proximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximus NV has no effect on the direction of KBC Groep i.e., KBC Groep and Proximus go up and down completely randomly.
Pair Corralation between KBC Groep and Proximus
Assuming the 90 days trading horizon KBC Groep NV is expected to generate 1.34 times more return on investment than Proximus. However, KBC Groep is 1.34 times more volatile than Proximus NV. It trades about 0.1 of its potential returns per unit of risk. Proximus NV is currently generating about -0.01 per unit of risk. If you would invest 6,721 in KBC Groep NV on August 28, 2024 and sell it today you would earn a total of 179.00 from holding KBC Groep NV or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Groep NV vs. Proximus NV
Performance |
| Timeline |
| KBC Groep NV |
| Proximus NV |
KBC Groep and Proximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Groep and Proximus
The main advantage of trading using opposite KBC Groep and Proximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep position performs unexpectedly, Proximus 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 Proximus will offset losses from the drop in Proximus' long position.| KBC Groep vs. ageas SANV | KBC Groep vs. Solvay SA | KBC Groep vs. Etablissementen Franz Colruyt | KBC Groep vs. Groep Brussel Lambert |
| Proximus vs. Bpost NV | Proximus vs. Etablissementen Franz Colruyt | Proximus vs. ageas SANV | Proximus vs. KBC Groep NV |
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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