Correlation Between Vastned Retail and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Vastned Retail 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 Vastned Retail and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Vastned Retail 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 Vastned Retail with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Koninklijke Ahold.
Diversification Opportunities for Vastned Retail and Koninklijke Ahold
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vastned and Koninklijke is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Vastned Retail 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 Vastned Retail NV 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 Vastned Retail i.e., Vastned Retail and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Vastned Retail and Koninklijke Ahold
Assuming the 90 days horizon Vastned Retail NV is expected to under-perform the Koninklijke Ahold. But the stock apears to be less risky and, when comparing its historical volatility, Vastned Retail NV is 1.16 times less risky than Koninklijke Ahold. The stock trades about -0.11 of its potential returns per unit of risk. The Koninklijke Ahold Delhaize is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,250 in Koninklijke Ahold Delhaize on September 13, 2024 and sell it today you would lose (28.00) from holding Koninklijke Ahold Delhaize or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Vastned Retail NV |
| Koninklijke Ahold |
Vastned Retail and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Koninklijke Ahold
The main advantage of trading using opposite Vastned Retail and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail 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.| Vastned Retail vs. Guidewire Software | Vastned Retail vs. Evolution Mining Limited | Vastned Retail vs. TAL Education Group | Vastned Retail vs. MAGIC SOFTWARE ENTR |
| Koninklijke Ahold vs. Strategic Education | Koninklijke Ahold vs. CAREER EDUCATION | Koninklijke Ahold vs. Mitsubishi Materials | Koninklijke Ahold vs. Goodyear Tire Rubber |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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