Correlation Between Brera Holdings and Koninklijke Ahold

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

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

Diversification Opportunities for Brera Holdings and Koninklijke Ahold

-0.49

Correlation Coefficient

Brera Holdings  Koninklijke Ahold

Very good diversification

The 3 months correlation between Brera and Koninklijke is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Brera Holdings PLC and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Brera Holdings 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 Brera Holdings PLC 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 Brera Holdings i.e., Brera Holdings and Koninklijke Ahold go up and down completely randomly.

Pair Corralation between Brera Holdings and Koninklijke Ahold

Given the investment horizon of 90 days Brera Holdings PLC is expected to generate 4.84 times more return on investment than Koninklijke Ahold. However, Brera Holdings is 4.84 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.02 of its potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.07 per unit of risk. If you would invest  73.00  in Brera Holdings PLC on December 1, 2024 and sell it today you would lose (7.00) from holding Brera Holdings PLC or give up 9.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Brera Holdings PLC  vs.  Koninklijke Ahold Delhaize

Brera Holdings PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brera Holdings PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Brera Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Koninklijke Ahold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Koninklijke Ahold Delhaize are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting fundamental indicators, Koninklijke Ahold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Brera Holdings and Koninklijke Ahold

The main advantage of trading using opposite Brera Holdings and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brera Holdings 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.

The idea behind Brera Holdings PLC and Koninklijke Ahold Delhaize 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.