Correlation Between Bank Central and KBC Groep
Can any of the company-specific risk be diversified away by investing in both Bank Central and KBC Groep 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 Bank Central and KBC Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and KBC Groep NV, you can compare the effects of market volatilities on Bank Central and KBC Groep 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 Bank Central with a short position of KBC Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and KBC Groep.
Diversification Opportunities for Bank Central and KBC Groep
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and KBC is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and KBC Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Groep NV and Bank Central 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 Bank Central Asia are associated (or correlated) with KBC Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Groep NV has no effect on the direction of Bank Central i.e., Bank Central and KBC Groep go up and down completely randomly.
Pair Corralation between Bank Central and KBC Groep
Assuming the 90 days horizon Bank Central is expected to generate 1.7 times less return on investment than KBC Groep. But when comparing it to its historical volatility, Bank Central Asia is 1.07 times less risky than KBC Groep. It trades about 0.02 of its potential returns per unit of risk. KBC Groep NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,186 in KBC Groep NV on October 21, 2024 and sell it today you would earn a total of 564.00 from holding KBC Groep NV or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. KBC Groep NV
Performance |
| Timeline |
| Bank Central Asia |
| KBC Groep NV |
Bank Central and KBC Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and KBC Groep
The main advantage of trading using opposite Bank Central and KBC Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, KBC Groep 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 KBC Groep will offset losses from the drop in KBC Groep's long position.| Bank Central vs. The Farmers Bank | Bank Central vs. CCSB Financial Corp | Bank Central vs. Bank of Utica | Bank Central vs. Delhi Bank Corp |
| KBC Groep vs. DBS Group Holdings | KBC Groep vs. United Overseas Bank | KBC Groep vs. Overseas Chinese Banking | KBC Groep vs. China Minsh |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |