Correlation Between Koninklijke KPN and XL Axiata
Can any of the company-specific risk be diversified away by investing in both Koninklijke KPN and XL Axiata 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 XL Axiata 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 XL Axiata Tbk, you can compare the effects of market volatilities on Koninklijke KPN and XL Axiata 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 XL Axiata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke KPN and XL Axiata.
Diversification Opportunities for Koninklijke KPN and XL Axiata
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and PTXKY is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke KPN NV and XL Axiata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Axiata Tbk 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 XL Axiata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Axiata Tbk has no effect on the direction of Koninklijke KPN i.e., Koninklijke KPN and XL Axiata go up and down completely randomly.
Pair Corralation between Koninklijke KPN and XL Axiata
If you would invest 334.00 in Koninklijke KPN NV on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Koninklijke KPN NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Koninklijke KPN NV vs. XL Axiata Tbk
Performance |
| Timeline |
| Koninklijke KPN NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| XL Axiata Tbk |
Koninklijke KPN and XL Axiata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke KPN and XL Axiata
The main advantage of trading using opposite Koninklijke KPN and XL Axiata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke KPN position performs unexpectedly, XL Axiata 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 XL Axiata will offset losses from the drop in XL Axiata's long position.| Koninklijke KPN vs. Pegasus Tel | Koninklijke KPN vs. SwissCom AG | Koninklijke KPN vs. Hellenic Telecommunications Org | Koninklijke KPN vs. KonaTel |
| XL Axiata vs. MTN Group Ltd | XL Axiata vs. Vodacom Group Ltd | XL Axiata vs. Telenor ASA ADR | XL Axiata vs. KT Corporation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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