Correlation Between Koninklijke KPN and IShares VII
Can any of the company-specific risk be diversified away by investing in both Koninklijke KPN and IShares VII 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 IShares VII 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 iShares VII Public, you can compare the effects of market volatilities on Koninklijke KPN and IShares VII 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 IShares VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke KPN and IShares VII.
Diversification Opportunities for Koninklijke KPN and IShares VII
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Koninklijke and IShares is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke KPN NV and iShares VII Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII Public 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 IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII Public has no effect on the direction of Koninklijke KPN i.e., Koninklijke KPN and IShares VII go up and down completely randomly.
Pair Corralation between Koninklijke KPN and IShares VII
Assuming the 90 days trading horizon Koninklijke KPN is expected to generate 1.66 times less return on investment than IShares VII. But when comparing it to its historical volatility, Koninklijke KPN NV is 1.35 times less risky than IShares VII. It trades about 0.13 of its potential returns per unit of risk. iShares VII Public is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 12,715 in iShares VII Public on November 28, 2024 and sell it today you would earn a total of 620.00 from holding iShares VII Public or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Koninklijke KPN NV vs. iShares VII Public
Performance |
| Timeline |
| Koninklijke KPN NV |
| iShares VII Public |
Koninklijke KPN and IShares VII Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke KPN and IShares VII
The main advantage of trading using opposite Koninklijke KPN and IShares VII positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke KPN position performs unexpectedly, IShares VII 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 IShares VII will offset losses from the drop in IShares VII's long position.| Koninklijke KPN vs. Aegon NV | Koninklijke KPN vs. Koninklijke Philips NV | Koninklijke KPN vs. Randstad NV | Koninklijke KPN vs. Akzo Nobel NV |
| IShares VII vs. iShares MSCI EM | IShares VII vs. iShares III Public | IShares VII vs. iShares Core MSCI | IShares VII vs. iShares France Govt |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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