Correlation Between Koninklijke KPN and Vodacom Group
Can any of the company-specific risk be diversified away by investing in both Koninklijke KPN and Vodacom Group 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 Vodacom Group 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 Vodacom Group Ltd, you can compare the effects of market volatilities on Koninklijke KPN and Vodacom Group 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 Vodacom Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke KPN and Vodacom Group.
Diversification Opportunities for Koninklijke KPN and Vodacom Group
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and Vodacom is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke KPN NV and Vodacom Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodacom Group 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 Vodacom Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodacom Group has no effect on the direction of Koninklijke KPN i.e., Koninklijke KPN and Vodacom Group go up and down completely randomly.
Pair Corralation between Koninklijke KPN and Vodacom Group
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. Vodacom Group Ltd
Performance |
| Timeline |
| Koninklijke KPN NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vodacom Group |
Koninklijke KPN and Vodacom Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke KPN and Vodacom Group
The main advantage of trading using opposite Koninklijke KPN and Vodacom Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke KPN position performs unexpectedly, Vodacom Group 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 Vodacom Group will offset losses from the drop in Vodacom Group's long position.| Koninklijke KPN vs. Pegasus Tel | Koninklijke KPN vs. SwissCom AG | Koninklijke KPN vs. Hellenic Telecommunications Org | Koninklijke KPN vs. KonaTel |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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