Correlation Between Koninklijke KPN and VEON
Can any of the company-specific risk be diversified away by investing in both Koninklijke KPN and VEON 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 VEON 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 VEON, you can compare the effects of market volatilities on Koninklijke KPN and VEON 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 VEON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke KPN and VEON.
Diversification Opportunities for Koninklijke KPN and VEON
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Koninklijke and VEON is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke KPN NV and VEON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEON 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 VEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEON has no effect on the direction of Koninklijke KPN i.e., Koninklijke KPN and VEON go up and down completely randomly.
Pair Corralation between Koninklijke KPN and VEON
Assuming the 90 days trading horizon Koninklijke KPN is expected to generate 3.33 times less return on investment than VEON. But when comparing it to its historical volatility, Koninklijke KPN NV is 2.92 times less risky than VEON. It trades about 0.08 of its potential returns per unit of risk. VEON is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 94.00 in VEON on August 30, 2024 and sell it today you would earn a total of 25.00 from holding VEON or generate 26.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Koninklijke KPN NV vs. VEON
Performance |
| Timeline |
| Koninklijke KPN NV |
| VEON |
Koninklijke KPN and VEON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke KPN and VEON
The main advantage of trading using opposite Koninklijke KPN and VEON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke KPN position performs unexpectedly, VEON 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 VEON will offset losses from the drop in VEON'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 |
| VEON vs. Van Lanschot NV | VEON vs. Amsterdam Commodities NV | VEON vs. ForFarmers NV | VEON vs. Wereldhave NV |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |