Correlation Between HAL Trust and Koninklijke Heijmans

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

By analyzing existing cross correlation between HAL Trust and Koninklijke Heijmans NV, you can compare the effects of market volatilities on HAL Trust and Koninklijke Heijmans 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 HAL Trust with a short position of Koninklijke Heijmans. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and Koninklijke Heijmans.

Diversification Opportunities for HAL Trust and Koninklijke Heijmans

0.04

Correlation Coefficient

HAL Trust  Koninklijke Heijmans

Significant diversification

The 3 months correlation between HAL and Koninklijke is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust and Koninklijke Heijmans NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Heijmans and HAL Trust 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 HAL Trust are associated (or correlated) with Koninklijke Heijmans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Heijmans has no effect on the direction of HAL Trust i.e., HAL Trust and Koninklijke Heijmans go up and down completely randomly.

Pair Corralation between HAL Trust and Koninklijke Heijmans

Assuming the 90 days trading horizon HAL Trust is expected to generate 712.0 times less return on investment than Koninklijke Heijmans. But when comparing it to its historical volatility, HAL Trust is 6.11 times less risky than Koninklijke Heijmans. It trades about 0.0 of its potential returns per unit of risk. Koninklijke Heijmans NV is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  2,915  in Koninklijke Heijmans NV on November 28, 2024 and sell it today you would earn a total of  835.00  from holding Koninklijke Heijmans NV or generate 28.64% return on investment over 90 days.

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

HAL Trust  vs.  Koninklijke Heijmans NV

HAL Trust

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HAL Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, HAL Trust is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Koninklijke Heijmans

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Koninklijke Heijmans NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Koninklijke Heijmans sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HAL Trust and Koninklijke Heijmans

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

The idea behind HAL Trust and Koninklijke Heijmans 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.