Correlation Between RETAIL FOOD and KBC Ancora

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

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

Diversification Opportunities for RETAIL FOOD and KBC Ancora

-0.35

Correlation Coefficient

RETAIL FOOD  KBC Ancora

Very good diversification

The 3 months correlation between RETAIL and KBC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and KBC Ancora SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora SCA and RETAIL FOOD 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 RETAIL FOOD GROUP 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 SCA has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and KBC Ancora go up and down completely randomly.

Pair Corralation between RETAIL FOOD and KBC Ancora

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the KBC Ancora. In addition to that, RETAIL FOOD is 2.21 times more volatile than KBC Ancora SCA. It trades about -0.02 of its total potential returns per unit of risk. KBC Ancora SCA is currently generating about 0.05 per unit of volatility. If you would invest  3,769  in KBC Ancora SCA on October 11, 2024 and sell it today you would earn a total of  1,321  from holding KBC Ancora SCA or generate 35.05% return on investment over 90 days.

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

RETAIL FOOD GROUP  vs.  KBC Ancora SCA

RETAIL FOOD GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

KBC Ancora SCA

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora SCA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, KBC Ancora may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with RETAIL FOOD and KBC Ancora

The main advantage of trading using opposite RETAIL FOOD and KBC Ancora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RETAIL FOOD 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 RETAIL FOOD GROUP and KBC Ancora SCA 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.