Correlation Between KBC Groep and Overseas Chinese
Can any of the company-specific risk be diversified away by investing in both KBC Groep and Overseas Chinese 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 Overseas Chinese 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 Overseas Chinese Banking, you can compare the effects of market volatilities on KBC Groep and Overseas Chinese 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 Overseas Chinese. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and Overseas Chinese.
Diversification Opportunities for KBC Groep and Overseas Chinese
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KBC and Overseas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and Overseas Chinese Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overseas Chinese Banking 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 Overseas Chinese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overseas Chinese Banking has no effect on the direction of KBC Groep i.e., KBC Groep and Overseas Chinese go up and down completely randomly.
Pair Corralation between KBC Groep and Overseas Chinese
Assuming the 90 days horizon KBC Groep is expected to generate 1.12 times less return on investment than Overseas Chinese. In addition to that, KBC Groep is 1.33 times more volatile than Overseas Chinese Banking. It trades about 0.05 of its total potential returns per unit of risk. Overseas Chinese Banking is currently generating about 0.08 per unit of volatility. If you would invest 1,604 in Overseas Chinese Banking on August 30, 2024 and sell it today you would earn a total of 787.00 from holding Overseas Chinese Banking or generate 49.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Groep NV vs. Overseas Chinese Banking
Performance |
| Timeline |
| KBC Groep NV |
| Overseas Chinese Banking |
KBC Groep and Overseas Chinese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Groep and Overseas Chinese
The main advantage of trading using opposite KBC Groep and Overseas Chinese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep position performs unexpectedly, Overseas Chinese 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 Overseas Chinese will offset losses from the drop in Overseas Chinese's long position.| KBC Groep vs. DBS Group Holdings | KBC Groep vs. United Overseas Bank | KBC Groep vs. Overseas Chinese Banking | KBC Groep vs. China Minsh |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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