Correlation Between Kinepolis Group and Solvay SA

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Kinepolis Group and Solvay SA 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 Kinepolis Group and Solvay SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinepolis Group NV and Solvay SA, you can compare the effects of market volatilities on Kinepolis Group and Solvay SA 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 Kinepolis Group with a short position of Solvay SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinepolis Group and Solvay SA.

Diversification Opportunities for Kinepolis Group and Solvay SA

0.38
  Correlation Coefficient

Weak diversification

The 3 months correlation between Kinepolis and Solvay is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Kinepolis Group NV and Solvay SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solvay SA and Kinepolis Group 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 Kinepolis Group NV are associated (or correlated) with Solvay SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solvay SA has no effect on the direction of Kinepolis Group i.e., Kinepolis Group and Solvay SA go up and down completely randomly.

Pair Corralation between Kinepolis Group and Solvay SA

Assuming the 90 days trading horizon Kinepolis Group NV is expected to under-perform the Solvay SA. In addition to that, Kinepolis Group is 1.45 times more volatile than Solvay SA. It trades about -0.04 of its total potential returns per unit of risk. Solvay SA is currently generating about 0.04 per unit of volatility. If you would invest  2,974  in Solvay SA on October 25, 2024 and sell it today you would earn a total of  22.00  from holding Solvay SA or generate 0.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Kinepolis Group NV  vs.  Solvay SA

 Performance 
       Timeline  
Kinepolis Group NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kinepolis Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Kinepolis Group is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Solvay SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Solvay SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kinepolis Group and Solvay SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kinepolis Group and Solvay SA

The main advantage of trading using opposite Kinepolis Group and Solvay SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinepolis Group position performs unexpectedly, Solvay SA 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 Solvay SA will offset losses from the drop in Solvay SA's long position.
The idea behind Kinepolis Group NV and Solvay SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

Other Complementary Tools

Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon