Correlation Between Ageas SANV and KBC Ancora

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

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

Diversification Opportunities for Ageas SANV and KBC Ancora

0.07

Correlation Coefficient

Ageas SANV  KBC Ancora

Significant diversification

The 3 months correlation between Ageas and KBC is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding ageas SANV and KBC Ancora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora and Ageas SANV 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 ageas SANV 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 has no effect on the direction of Ageas SANV i.e., Ageas SANV and KBC Ancora go up and down completely randomly.

Pair Corralation between Ageas SANV and KBC Ancora

Assuming the 90 days trading horizon ageas SANV is expected to generate 1.16 times more return on investment than KBC Ancora. However, Ageas SANV is 1.16 times more volatile than KBC Ancora. It trades about 0.06 of its potential returns per unit of risk. KBC Ancora is currently generating about 0.06 per unit of risk. If you would invest  4,729  in ageas SANV on September 17, 2024 and sell it today you would earn a total of  51.00  from holding ageas SANV or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ageas SANV  vs.  KBC Ancora

ageas SANV

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ageas SANV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Ageas SANV is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

KBC Ancora

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, KBC Ancora is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ageas SANV and KBC Ancora

The main advantage of trading using opposite Ageas SANV and KBC Ancora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ageas SANV 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 ageas SANV and KBC Ancora 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.