Correlation Between KBC Groep and Bank Central
Can any of the company-specific risk be diversified away by investing in both KBC Groep and Bank Central 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 Bank Central 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 Bank Central Asia, you can compare the effects of market volatilities on KBC Groep and Bank Central 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 Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and Bank Central.
Diversification Opportunities for KBC Groep and Bank Central
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBC and Bank is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia 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 Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of KBC Groep i.e., KBC Groep and Bank Central go up and down completely randomly.
Pair Corralation between KBC Groep and Bank Central
Assuming the 90 days horizon KBC Groep NV is expected to under-perform the Bank Central. But the pink sheet apears to be less risky and, when comparing its historical volatility, KBC Groep NV is 1.49 times less risky than Bank Central. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Bank Central Asia is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,462 in Bank Central Asia on October 20, 2024 and sell it today you would earn a total of 40.00 from holding Bank Central Asia or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Groep NV vs. Bank Central Asia
Performance |
| Timeline |
| KBC Groep NV |
| Bank Central Asia |
KBC Groep and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Groep and Bank Central
The main advantage of trading using opposite KBC Groep and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central'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 |
| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |