Correlation Between Kendrion and IShares VII

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

By analyzing existing cross correlation between Kendrion NV and iShares VII Public, you can compare the effects of market volatilities on Kendrion and IShares VII 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 Kendrion with a short position of IShares VII. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kendrion and IShares VII.

Diversification Opportunities for Kendrion and IShares VII

0.55

Correlation Coefficient

Kendrion  IShares VII

Very weak diversification

The 3 months correlation between Kendrion and IShares is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kendrion NV and iShares VII Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares VII Public and Kendrion 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 Kendrion NV are associated (or correlated) with IShares VII. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares VII Public has no effect on the direction of Kendrion i.e., Kendrion and IShares VII go up and down completely randomly.

Pair Corralation between Kendrion and IShares VII

Assuming the 90 days trading horizon Kendrion NV is expected to under-perform the IShares VII. In addition to that, Kendrion is 1.16 times more volatile than iShares VII Public. It trades about -0.12 of its total potential returns per unit of risk. iShares VII Public is currently generating about 0.0 per unit of volatility. If you would invest  13,201  in iShares VII Public on September 17, 2024 and sell it today you would lose (67.00) from holding iShares VII Public or give up 0.51% of portfolio value over 90 days.

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

Kendrion NV  vs.  iShares VII Public

Kendrion NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kendrion NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

iShares VII Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares VII Public has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares VII 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 Kendrion and IShares VII

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

The idea behind Kendrion NV and iShares VII Public 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.