Correlation Between Koninklijke KPN and United States
Can any of the company-specific risk be diversified away by investing in both Koninklijke KPN and United States 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 United States 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 United States Cellular, you can compare the effects of market volatilities on Koninklijke KPN and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke KPN and United States.
Diversification Opportunities for Koninklijke KPN and United States
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koninklijke and United is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke KPN NV and United States Cellular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Cellular 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Cellular has no effect on the direction of Koninklijke KPN i.e., Koninklijke KPN and United States go up and down completely randomly.
Pair Corralation between Koninklijke KPN and United States
If you would invest 2,240 in United States Cellular on August 24, 2024 and sell it today you would earn a total of 37.00 from holding United States Cellular or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Koninklijke KPN NV vs. United States Cellular
Performance |
| Timeline |
| Koninklijke KPN NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| United States Cellular |
Koninklijke KPN and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke KPN and United States
The main advantage of trading using opposite Koninklijke KPN and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke KPN position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Koninklijke KPN vs. Pegasus Tel | Koninklijke KPN vs. SwissCom AG | Koninklijke KPN vs. Hellenic Telecommunications Org | Koninklijke KPN vs. KonaTel |
| United States vs. United States Cellular | United States vs. United States Cellular | United States vs. Office Properties Income | United States vs. KKRS |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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