Correlation Between Koninklijke Philips and Odyssey Group
Can any of the company-specific risk be diversified away by investing in both Koninklijke Philips and Odyssey Group 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 Philips and Odyssey Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Philips NV and Odyssey Group International, you can compare the effects of market volatilities on Koninklijke Philips and Odyssey Group 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 Philips with a short position of Odyssey Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Philips and Odyssey Group.
Diversification Opportunities for Koninklijke Philips and Odyssey Group
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koninklijke and Odyssey is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips NV and Odyssey Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Group Intern and Koninklijke Philips 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 Philips NV are associated (or correlated) with Odyssey Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Group Intern has no effect on the direction of Koninklijke Philips i.e., Koninklijke Philips and Odyssey Group go up and down completely randomly.
Pair Corralation between Koninklijke Philips and Odyssey Group
Considering the 90-day investment horizon Koninklijke Philips is expected to generate 146.24 times less return on investment than Odyssey Group. But when comparing it to its historical volatility, Koninklijke Philips NV is 11.54 times less risky than Odyssey Group. It trades about 0.02 of its potential returns per unit of risk. Odyssey Group International is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1.60 in Odyssey Group International on September 13, 2024 and sell it today you would earn a total of 1.10 from holding Odyssey Group International or generate 68.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Philips NV vs. Odyssey Group International
Performance |
| Timeline |
| Koninklijke Philips |
| Odyssey Group Intern |
Koninklijke Philips and Odyssey Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Philips and Odyssey Group
The main advantage of trading using opposite Koninklijke Philips and Odyssey Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Philips position performs unexpectedly, Odyssey Group 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 Odyssey Group will offset losses from the drop in Odyssey Group's long position.| Koninklijke Philips vs. ZimVie Inc | Koninklijke Philips vs. Stryker | Koninklijke Philips vs. Boston Scientific Corp | Koninklijke Philips vs. STERIS plc |
| Odyssey Group vs. Abbott Laboratories | Odyssey Group vs. Stryker | Odyssey Group vs. Boston Scientific Corp | Odyssey Group vs. Medtronic PLC |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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