Correlation Between Koninklijke Ahold and Sendas Distribuidora

Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and Sendas Distribuidora 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 Koninklijke Ahold and Sendas Distribuidora into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Koninklijke Ahold Delhaize and Sendas Distribuidora SA, you can compare the effects of market volatilities on Koninklijke Ahold and Sendas Distribuidora 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 Koninklijke Ahold with a short position of Sendas Distribuidora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and Sendas Distribuidora.

Diversification Opportunities for Koninklijke Ahold and Sendas Distribuidora

0.49

Correlation Coefficient

Koninklijke Ahold  Sendas Distribuidora

Very weak diversification

The 3 months correlation between Koninklijke and Sendas is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and Sendas Distribuidora SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sendas Distribuidora and Koninklijke Ahold 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 Koninklijke Ahold Delhaize are associated (or correlated) with Sendas Distribuidora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sendas Distribuidora has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and Sendas Distribuidora go up and down completely randomly.

Pair Corralation between Koninklijke Ahold and Sendas Distribuidora

If you would invest  3,466  in Koninklijke Ahold Delhaize on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Koninklijke Ahold Delhaize or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Koninklijke Ahold Delhaize  vs.  Sendas Distribuidora SA

Koninklijke Ahold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Koninklijke Ahold Delhaize has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Koninklijke Ahold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Sendas Distribuidora

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sendas Distribuidora SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Koninklijke Ahold and Sendas Distribuidora

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

The idea behind Koninklijke Ahold Delhaize and Sendas Distribuidora SA 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.