Correlation Between Sligro Food and Kendrion
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Kendrion 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 Sligro Food and Kendrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Kendrion NV, you can compare the effects of market volatilities on Sligro Food and Kendrion 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 Sligro Food with a short position of Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Kendrion.
Diversification Opportunities for Sligro Food and Kendrion
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sligro and Kendrion is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and Sligro Food 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 Sligro Food Group are associated (or correlated) with Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of Sligro Food i.e., Sligro Food and Kendrion go up and down completely randomly.
Pair Corralation between Sligro Food and Kendrion
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Kendrion. In addition to that, Sligro Food is 1.42 times more volatile than Kendrion NV. It trades about -0.18 of its total potential returns per unit of risk. Kendrion NV is currently generating about -0.06 per unit of volatility. If you would invest 1,054 in Kendrion NV on November 5, 2024 and sell it today you would lose (18.00) from holding Kendrion NV or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Kendrion NV
Performance |
| Timeline |
| Sligro Food Group |
| Kendrion NV |
Sligro Food and Kendrion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Kendrion
The main advantage of trading using opposite Sligro Food and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Kendrion 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 Kendrion will offset losses from the drop in Kendrion's long position.| Sligro Food vs. TKH Group NV | Sligro Food vs. Brunel International NV | Sligro Food vs. Koninklijke BAM Groep | Sligro Food vs. Koninklijke Vopak NV |
| Kendrion vs. TKH Group NV | Kendrion vs. NV Nederlandsche Apparatenfabriek | Kendrion vs. Brunel International NV | Kendrion vs. Aalberts Industries 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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