Correlation Between Corporate Travel and KBC Ancora

Can any of the company-specific risk be diversified away by investing in both Corporate Travel and KBC Ancora 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 Corporate Travel and KBC Ancora into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Corporate Travel Management and KBC Ancora SCA, you can compare the effects of market volatilities on Corporate Travel and KBC Ancora 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 Corporate Travel with a short position of KBC Ancora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and KBC Ancora.

Diversification Opportunities for Corporate Travel and KBC Ancora

0.09

Correlation Coefficient

Corporate Travel  KBC Ancora

Significant diversification

The 3 months correlation between Corporate and KBC is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management and KBC Ancora SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora SCA and Corporate Travel 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 Corporate Travel Management are associated (or correlated) with KBC Ancora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Ancora SCA has no effect on the direction of Corporate Travel i.e., Corporate Travel and KBC Ancora go up and down completely randomly.

Pair Corralation between Corporate Travel and KBC Ancora

Assuming the 90 days trading horizon Corporate Travel is expected to generate 4.61 times less return on investment than KBC Ancora. In addition to that, Corporate Travel is 2.15 times more volatile than KBC Ancora SCA. It trades about 0.01 of its total potential returns per unit of risk. KBC Ancora SCA is currently generating about 0.14 per unit of volatility. If you would invest  4,630  in KBC Ancora SCA on October 10, 2024 and sell it today you would earn a total of  500.00  from holding KBC Ancora SCA or generate 10.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Corporate Travel Management  vs.  KBC Ancora SCA

Corporate Travel Man

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Travel Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Corporate Travel is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

KBC Ancora SCA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora SCA are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, KBC Ancora may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Corporate Travel and KBC Ancora

The main advantage of trading using opposite Corporate Travel and KBC Ancora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel position performs unexpectedly, KBC Ancora 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 KBC Ancora will offset losses from the drop in KBC Ancora's long position.

The idea behind Corporate Travel Management and KBC Ancora SCA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.