Correlation Between Koninklijke Philips and Axonics Modulation

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

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

Diversification Opportunities for Koninklijke Philips and Axonics Modulation

0.0

Correlation Coefficient

Koninklijke Philips  Axonics Modulation

Pay attention - limited upside

The 3 months correlation between Koninklijke and Axonics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips NV and Axonics Modulation Technologie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axonics Modulation and Koninklijke Philips 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 Koninklijke Philips NV are associated (or correlated) with Axonics Modulation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axonics Modulation has no effect on the direction of Koninklijke Philips i.e., Koninklijke Philips and Axonics Modulation go up and down completely randomly.

Pair Corralation between Koninklijke Philips and Axonics Modulation

If you would invest  2,534  in Koninklijke Philips NV on December 30, 2024 and sell it today you would earn a total of  30.00  from holding Koninklijke Philips NV or generate 1.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Koninklijke Philips NV  vs.  Axonics Modulation Technologie

Koninklijke Philips

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Koninklijke Philips NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Koninklijke Philips is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Axonics Modulation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Axonics Modulation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Axonics Modulation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Koninklijke Philips and Axonics Modulation

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

The idea behind Koninklijke Philips NV and Axonics Modulation Technologies 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.