Correlation Between Keyware Technologies and Proximus
Can any of the company-specific risk be diversified away by investing in both Keyware Technologies and Proximus 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 Proximus 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 Proximus NV, you can compare the effects of market volatilities on Keyware Technologies and Proximus 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 Proximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyware Technologies and Proximus.
Diversification Opportunities for Keyware Technologies and Proximus
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Keyware and Proximus is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Keyware Technologies NV and Proximus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximus NV 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 Proximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximus NV has no effect on the direction of Keyware Technologies i.e., Keyware Technologies and Proximus go up and down completely randomly.
Pair Corralation between Keyware Technologies and Proximus
Assuming the 90 days trading horizon Keyware Technologies NV is expected to under-perform the Proximus. But the stock apears to be less risky and, when comparing its historical volatility, Keyware Technologies NV is 2.01 times less risky than Proximus. The stock trades about -0.04 of its potential returns per unit of risk. The Proximus NV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 517.00 in Proximus NV on November 18, 2024 and sell it today you would earn a total of 17.00 from holding Proximus NV or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyware Technologies NV vs. Proximus NV
Performance |
| Timeline |
| Keyware Technologies |
| Proximus NV |
Keyware Technologies and Proximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyware Technologies and Proximus
The main advantage of trading using opposite Keyware Technologies and Proximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyware Technologies position performs unexpectedly, Proximus 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 Proximus will offset losses from the drop in Proximus' long position.| Keyware Technologies vs. Crescent NV | Keyware Technologies vs. Ion Beam Applications | Keyware Technologies vs. Nyrstar NV | Keyware Technologies vs. AGFA Gevaert NV |
| Proximus vs. Bpost NV | Proximus vs. Etablissementen Franz Colruyt | Proximus vs. ageas SANV | Proximus 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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