Correlation Between Kendrion and Sif Holding
Can any of the company-specific risk be diversified away by investing in both Kendrion and Sif Holding 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 Kendrion and Sif Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kendrion NV and Sif Holding NV, you can compare the effects of market volatilities on Kendrion and Sif Holding 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 Kendrion with a short position of Sif Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kendrion and Sif Holding.
Diversification Opportunities for Kendrion and Sif Holding
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kendrion and Sif is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kendrion NV and Sif Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sif Holding NV and Kendrion 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 Kendrion NV are associated (or correlated) with Sif Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sif Holding NV has no effect on the direction of Kendrion i.e., Kendrion and Sif Holding go up and down completely randomly.
Pair Corralation between Kendrion and Sif Holding
Assuming the 90 days trading horizon Kendrion NV is expected to generate 1.47 times more return on investment than Sif Holding. However, Kendrion is 1.47 times more volatile than Sif Holding NV. It trades about -0.1 of its potential returns per unit of risk. Sif Holding NV is currently generating about -0.2 per unit of risk. If you would invest 1,134 in Kendrion NV on September 13, 2024 and sell it today you would lose (56.00) from holding Kendrion NV or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kendrion NV vs. Sif Holding NV
Performance |
| Timeline |
| Kendrion NV |
| Sif Holding NV |
Kendrion and Sif Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kendrion and Sif Holding
The main advantage of trading using opposite Kendrion and Sif Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kendrion position performs unexpectedly, Sif Holding 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 Sif Holding will offset losses from the drop in Sif Holding's long position.| Kendrion vs. TKH Group NV | Kendrion vs. NV Nederlandsche Apparatenfabriek | Kendrion vs. Brunel International NV | Kendrion vs. Aalberts Industries NV |
| Sif Holding vs. Akzo Nobel NV | Sif Holding vs. Koninklijke KPN NV | Sif Holding vs. Aegon NV | Sif Holding vs. Wolters Kluwer 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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