Correlation Between Koninklijke KPN and Advanced Info
Can any of the company-specific risk be diversified away by investing in both Koninklijke KPN and Advanced Info 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 Koninklijke KPN and Advanced Info into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke KPN NV and Advanced Info Service, you can compare the effects of market volatilities on Koninklijke KPN and Advanced Info 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 Koninklijke KPN with a short position of Advanced Info. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke KPN and Advanced Info.
Diversification Opportunities for Koninklijke KPN and Advanced Info
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Koninklijke and Advanced is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke KPN NV and Advanced Info Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Info Service and Koninklijke KPN 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 Koninklijke KPN NV are associated (or correlated) with Advanced Info. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Info Service has no effect on the direction of Koninklijke KPN i.e., Koninklijke KPN and Advanced Info go up and down completely randomly.
Pair Corralation between Koninklijke KPN and Advanced Info
If you would invest 593.00 in Advanced Info Service on November 2, 2024 and sell it today you would earn a total of 342.00 from holding Advanced Info Service or generate 57.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.23% |
| Values | Daily Returns |
Koninklijke KPN NV vs. Advanced Info Service
Performance |
| Timeline |
| Koninklijke KPN NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Advanced Info Service |
Koninklijke KPN and Advanced Info Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke KPN and Advanced Info
The main advantage of trading using opposite Koninklijke KPN and Advanced Info positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke KPN position performs unexpectedly, Advanced Info 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 Advanced Info will offset losses from the drop in Advanced Info's long position.| Koninklijke KPN vs. Pegasus Tel | Koninklijke KPN vs. SwissCom AG | Koninklijke KPN vs. Hellenic Telecommunications Org | Koninklijke KPN vs. KonaTel |
| Advanced Info vs. BCE Inc | Advanced Info vs. Axiologix | Advanced Info vs. American Nortel Communications |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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