Correlation Between KBC Groep and Swedbank
Can any of the company-specific risk be diversified away by investing in both KBC Groep and Swedbank 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 Swedbank 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 Swedbank AB, you can compare the effects of market volatilities on KBC Groep and Swedbank 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 Swedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and Swedbank.
Diversification Opportunities for KBC Groep and Swedbank
Average diversification
The 3 months correlation between KBC and Swedbank is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB 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 Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of KBC Groep i.e., KBC Groep and Swedbank go up and down completely randomly.
Pair Corralation between KBC Groep and Swedbank
Assuming the 90 days horizon KBC Groep is expected to generate 1.39 times less return on investment than Swedbank. But when comparing it to its historical volatility, KBC Groep NV is 1.19 times less risky than Swedbank. It trades about 0.03 of its potential returns per unit of risk. Swedbank AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Swedbank AB on October 21, 2024 and sell it today you would earn a total of 417.00 from holding Swedbank AB or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
KBC Groep NV vs. Swedbank AB
Performance |
| Timeline |
| KBC Groep NV |
| Swedbank AB |
KBC Groep and Swedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Groep and Swedbank
The main advantage of trading using opposite KBC Groep and Swedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep position performs unexpectedly, Swedbank 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 Swedbank will offset losses from the drop in Swedbank'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 |
| Swedbank vs. United Overseas Bank | Swedbank vs. KBC Groep NV | Swedbank vs. Jyske Bank AS | Swedbank vs. Israel Discount Bank |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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