Correlation Between Seven I and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Seven I and Koninklijke Ahold 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 Seven I and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven i Holdings and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Seven I and Koninklijke Ahold 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 Seven I with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and Koninklijke Ahold.
Diversification Opportunities for Seven I and Koninklijke Ahold
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seven and Koninklijke is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Seven I 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 Seven i Holdings are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Seven I i.e., Seven I and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Seven I and Koninklijke Ahold
Assuming the 90 days horizon Seven i Holdings is expected to generate 2.4 times more return on investment than Koninklijke Ahold. However, Seven I is 2.4 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.21 of its potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.22 per unit of risk. If you would invest 1,367 in Seven i Holdings on August 29, 2024 and sell it today you would earn a total of 194.00 from holding Seven i Holdings or generate 14.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven i Holdings vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Seven i Holdings |
| Koninklijke Ahold |
Seven I and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven I and Koninklijke Ahold
The main advantage of trading using opposite Seven I and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Seven I vs. TESCO PLC LS 0633333 | Seven I vs. Superior Plus Corp | Seven I vs. NMI Holdings | Seven I vs. SIVERS SEMICONDUCTORS AB |
| Koninklijke Ahold vs. TESCO PLC LS 0633333 | Koninklijke Ahold vs. Superior Plus Corp | Koninklijke Ahold vs. NMI Holdings | Koninklijke Ahold vs. SIVERS SEMICONDUCTORS AB |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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