Correlation Between Keyware Technologies and Home Invest
Can any of the company-specific risk be diversified away by investing in both Keyware Technologies and Home Invest 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 Keyware Technologies and Home Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyware Technologies NV and Home Invest Belgium, you can compare the effects of market volatilities on Keyware Technologies and Home Invest 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 Keyware Technologies with a short position of Home Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyware Technologies and Home Invest.
Diversification Opportunities for Keyware Technologies and Home Invest
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Keyware and Home is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Keyware Technologies NV and Home Invest Belgium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Invest Belgium and Keyware Technologies 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 Keyware Technologies NV are associated (or correlated) with Home Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Invest Belgium has no effect on the direction of Keyware Technologies i.e., Keyware Technologies and Home Invest go up and down completely randomly.
Pair Corralation between Keyware Technologies and Home Invest
Assuming the 90 days trading horizon Keyware Technologies NV is expected to generate 0.71 times more return on investment than Home Invest. However, Keyware Technologies NV is 1.42 times less risky than Home Invest. It trades about -0.04 of its potential returns per unit of risk. Home Invest Belgium is currently generating about -0.17 per unit of risk. If you would invest 80.00 in Keyware Technologies NV on August 30, 2024 and sell it today you would lose (1.00) from holding Keyware Technologies NV or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyware Technologies NV vs. Home Invest Belgium
Performance |
| Timeline |
| Keyware Technologies |
| Home Invest Belgium |
Keyware Technologies and Home Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyware Technologies and Home Invest
The main advantage of trading using opposite Keyware Technologies and Home Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyware Technologies position performs unexpectedly, Home Invest 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 Home Invest will offset losses from the drop in Home Invest's long position.| Keyware Technologies vs. Crescent NV | Keyware Technologies vs. Ion Beam Applications | Keyware Technologies vs. Nyrstar NV | Keyware Technologies vs. AGFA Gevaert NV |
| Home Invest vs. Cofinimmo SA | Home Invest vs. Care Property Invest | Home Invest vs. Aedifica | Home Invest vs. Montea CVA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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