Correlation Between PostNL NV and VEON
Can any of the company-specific risk be diversified away by investing in both PostNL NV 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 PostNL NV and VEON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PostNL NV and VEON, you can compare the effects of market volatilities on PostNL NV 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 PostNL NV with a short position of VEON. Check out your portfolio center. Please also check ongoing floating volatility patterns of PostNL NV and VEON.
Diversification Opportunities for PostNL NV and VEON
Pay attention - limited upside
The 3 months correlation between PostNL and VEON is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding PostNL NV and VEON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEON and PostNL NV 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 PostNL 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 PostNL NV i.e., PostNL NV and VEON go up and down completely randomly.
Pair Corralation between PostNL NV and VEON
Assuming the 90 days trading horizon PostNL NV is expected to under-perform the VEON. But the stock apears to be less risky and, when comparing its historical volatility, PostNL NV is 1.49 times less risky than VEON. The stock trades about -0.03 of its potential returns per unit of risk. The VEON is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 63.00 in VEON on August 27, 2024 and sell it today you would earn a total of 56.00 from holding VEON or generate 88.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
PostNL NV vs. VEON
Performance |
| Timeline |
| PostNL NV |
| VEON |
PostNL NV and VEON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PostNL NV and VEON
The main advantage of trading using opposite PostNL NV and VEON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PostNL NV 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.| PostNL NV vs. Koninklijke Ahold Delhaize | PostNL NV vs. Bpost NV | PostNL NV vs. Aegon NV | PostNL NV vs. Koninklijke KPN 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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