Correlation Between Pinnacle Bancshares and KBC Groep
Can any of the company-specific risk be diversified away by investing in both Pinnacle Bancshares 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 Pinnacle Bancshares and KBC Groep into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pinnacle Bancshares and KBC Groep NV, you can compare the effects of market volatilities on Pinnacle Bancshares 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 Pinnacle Bancshares with a short position of KBC Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinnacle Bancshares and KBC Groep.
Diversification Opportunities for Pinnacle Bancshares and KBC Groep
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pinnacle and KBC is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pinnacle Bancshares 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 Pinnacle Bancshares 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 Pinnacle Bancshares 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 Pinnacle Bancshares i.e., Pinnacle Bancshares and KBC Groep go up and down completely randomly.
Pair Corralation between Pinnacle Bancshares and KBC Groep
Given the investment horizon of 90 days Pinnacle Bancshares is expected to under-perform the KBC Groep. But the pink sheet apears to be less risky and, when comparing its historical volatility, Pinnacle Bancshares is 1.14 times less risky than KBC Groep. The pink sheet trades about -0.31 of its potential returns per unit of risk. The 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 Together |
| Strength | Significant |
| Accuracy | 1.41% |
| Values | Daily Returns |
Pinnacle Bancshares vs. KBC Groep NV
Performance |
| Timeline |
| Pinnacle Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KBC Groep NV |
Pinnacle Bancshares and KBC Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pinnacle Bancshares and KBC Groep
The main advantage of trading using opposite Pinnacle Bancshares and KBC Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinnacle Bancshares 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.| Pinnacle Bancshares vs. Eastern Michigan Financial | Pinnacle Bancshares vs. Commercial National Financial | Pinnacle Bancshares vs. Mifflinburg Bancorp | Pinnacle Bancshares vs. Apollo Bancorp |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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