Correlation Between Retail Estates and Kinepolis Group
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Kinepolis 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 Retail Estates and Kinepolis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates and Kinepolis Group NV, you can compare the effects of market volatilities on Retail Estates and Kinepolis 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 Retail Estates with a short position of Kinepolis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Kinepolis Group.
Diversification Opportunities for Retail Estates and Kinepolis Group
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Retail and Kinepolis is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Kinepolis Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinepolis Group NV and Retail Estates 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 Retail Estates are associated (or correlated) with Kinepolis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinepolis Group NV has no effect on the direction of Retail Estates i.e., Retail Estates and Kinepolis Group go up and down completely randomly.
Pair Corralation between Retail Estates and Kinepolis Group
Assuming the 90 days trading horizon Retail Estates is expected to under-perform the Kinepolis Group. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates is 1.18 times less risky than Kinepolis Group. The stock trades about -0.28 of its potential returns per unit of risk. The Kinepolis Group NV is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,895 in Kinepolis Group NV on August 27, 2024 and sell it today you would lose (75.00) from holding Kinepolis Group NV or give up 1.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates vs. Kinepolis Group NV
Performance |
| Timeline |
| Retail Estates |
| Kinepolis Group NV |
Retail Estates and Kinepolis Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Kinepolis Group
The main advantage of trading using opposite Retail Estates and Kinepolis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Kinepolis 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 Kinepolis Group will offset losses from the drop in Kinepolis Group's long position.| Retail Estates vs. Cofinimmo SA | Retail Estates vs. Warehouses de Pauw | Retail Estates vs. Montea CVA | Retail Estates vs. Aedifica |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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