Correlation Between HAL Trust and Koninklijke Vopak

Can any of the company-specific risk be diversified away by investing in both HAL Trust and Koninklijke Vopak 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 Vopak 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 Vopak NV, you can compare the effects of market volatilities on HAL Trust and Koninklijke Vopak 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 Vopak. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and Koninklijke Vopak.

Diversification Opportunities for HAL Trust and Koninklijke Vopak

-0.42

Correlation Coefficient

HAL Trust  Koninklijke Vopak

Very good diversification

The 3 months correlation between HAL and Koninklijke is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust and Koninklijke Vopak NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Vopak 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 Vopak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Vopak has no effect on the direction of HAL Trust i.e., HAL Trust and Koninklijke Vopak go up and down completely randomly.

Pair Corralation between HAL Trust and Koninklijke Vopak

Assuming the 90 days trading horizon HAL Trust is expected to generate 0.47 times more return on investment than Koninklijke Vopak. However, HAL Trust is 2.13 times less risky than Koninklijke Vopak. It trades about 0.17 of its potential returns per unit of risk. Koninklijke Vopak NV is currently generating about -0.04 per unit of risk. If you would invest  11,360  in HAL Trust on December 22, 2024 and sell it today you would earn a total of  1,040  from holding HAL Trust or generate 9.15% return on investment over 90 days.

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

HAL Trust  vs.  Koninklijke Vopak NV

HAL Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HAL Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, HAL Trust may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Koninklijke Vopak

Risk-Adjusted Performance

Very Weak

Over the last 90 days Koninklijke Vopak NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Koninklijke Vopak is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with HAL Trust and Koninklijke Vopak

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

The idea behind HAL Trust and Koninklijke Vopak 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.