Correlation Between COVIVIO HOTELS and KBC Group

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

By analyzing existing cross correlation between COVIVIO HOTELS INH and KBC Group NV, you can compare the effects of market volatilities on COVIVIO HOTELS and KBC 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 COVIVIO HOTELS with a short position of KBC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and KBC Group.

Diversification Opportunities for COVIVIO HOTELS and KBC Group

0.0

Correlation Coefficient

COVIVIO HOTELS  KBC Group

Pay attention - limited upside

The 3 months correlation between COVIVIO and KBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and KBC Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Group NV and COVIVIO HOTELS 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 COVIVIO HOTELS INH are associated (or correlated) with KBC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Group NV has no effect on the direction of COVIVIO HOTELS i.e., COVIVIO HOTELS and KBC Group go up and down completely randomly.

Pair Corralation between COVIVIO HOTELS and KBC Group

If you would invest  1,830  in COVIVIO HOTELS INH on October 24, 2024 and sell it today you would earn a total of  60.00  from holding COVIVIO HOTELS INH or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

COVIVIO HOTELS INH  vs.  KBC Group NV

COVIVIO HOTELS INH

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COVIVIO HOTELS INH are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, COVIVIO HOTELS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KBC Group NV

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days KBC Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KBC Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with COVIVIO HOTELS and KBC Group

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

The idea behind COVIVIO HOTELS INH and KBC Group NV 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.