Correlation Between Loblaw Companies and Koninklijke Ahold
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By analyzing existing cross correlation between Loblaw Companies Limited and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Loblaw Companies and Koninklijke Ahold 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 Loblaw Companies with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loblaw Companies and Koninklijke Ahold.
Diversification Opportunities for Loblaw Companies and Koninklijke Ahold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loblaw and Koninklijke is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Loblaw Companies Limited and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Loblaw Companies 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 Loblaw Companies Limited are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Loblaw Companies i.e., Loblaw Companies and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Loblaw Companies and Koninklijke Ahold
Assuming the 90 days horizon Loblaw Companies Limited is expected to generate 0.79 times more return on investment than Koninklijke Ahold. However, Loblaw Companies Limited is 1.27 times less risky than Koninklijke Ahold. It trades about 0.07 of its potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.04 per unit of risk. If you would invest 8,264 in Loblaw Companies Limited on September 3, 2024 and sell it today you would earn a total of 3,936 from holding Loblaw Companies Limited or generate 47.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.41% |
| Values | Daily Returns |
Loblaw Companies Limited vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Loblaw Companies |
| Koninklijke Ahold |
Loblaw Companies and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loblaw Companies and Koninklijke Ahold
The main advantage of trading using opposite Loblaw Companies and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loblaw Companies position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Loblaw Companies vs. CapitaLand Investment Limited | Loblaw Companies vs. DIVERSIFIED ROYALTY | Loblaw Companies vs. EPSILON HEALTHCARE LTD | Loblaw Companies vs. PennantPark Investment |
| Koninklijke Ahold vs. Seven i Holdings | Koninklijke Ahold vs. AHOLD DELHAIADR16 EO 25 | Koninklijke Ahold vs. Loblaw Companies Limited | Koninklijke Ahold vs. TESCO PLC LS 0633333 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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