Correlation Between Brouwerij Handelsmaatschap and KBC Ancora

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

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

Diversification Opportunities for Brouwerij Handelsmaatschap and KBC Ancora

-0.81

Correlation Coefficient

Brouwerij Handelsmaatschap  KBC Ancora

Pay attention - limited upside

The 3 months correlation between Brouwerij and KBC is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Brouwerij Handelsmaatschappij and KBC Ancora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora and Brouwerij Handelsmaatschap 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 Brouwerij Handelsmaatschappij NV 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 Brouwerij Handelsmaatschap i.e., Brouwerij Handelsmaatschap and KBC Ancora go up and down completely randomly.

Pair Corralation between Brouwerij Handelsmaatschap and KBC Ancora

Assuming the 90 days trading horizon Brouwerij Handelsmaatschappij NV is expected to under-perform the KBC Ancora. In addition to that, Brouwerij Handelsmaatschap is 3.31 times more volatile than KBC Ancora. It trades about -0.11 of its total potential returns per unit of risk. KBC Ancora is currently generating about 0.18 per unit of volatility. If you would invest  4,680  in KBC Ancora on October 23, 2024 and sell it today you would earn a total of  450.00  from holding KBC Ancora or generate 9.62% return on investment over 90 days.

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

Brouwerij Handelsmaatschappij   vs.  KBC Ancora

Brouwerij Handelsmaatschap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brouwerij Handelsmaatschappij NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

KBC Ancora

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, KBC Ancora may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Brouwerij Handelsmaatschap and KBC Ancora

The main advantage of trading using opposite Brouwerij Handelsmaatschap and KBC Ancora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brouwerij Handelsmaatschap 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 Brouwerij Handelsmaatschappij NV 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.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.