Correlation Between Seven I and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Seven I and Koninklijke Ahold 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 Seven I and Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven i Holdings and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Seven I and Koninklijke Ahold 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 Seven I with a short position of Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and Koninklijke Ahold.
Diversification Opportunities for Seven I and Koninklijke Ahold
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seven and Koninklijke is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold and Seven I 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 Seven i Holdings are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Seven I i.e., Seven I and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Seven I and Koninklijke Ahold
Assuming the 90 days horizon Seven i Holdings is expected to under-perform the Koninklijke Ahold. But the pink sheet apears to be less risky and, when comparing its historical volatility, Seven i Holdings is 1.27 times less risky than Koninklijke Ahold. The pink sheet trades about -0.17 of its potential returns per unit of risk. The Koninklijke Ahold Delhaize is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,335 in Koninklijke Ahold Delhaize on December 2, 2024 and sell it today you would earn a total of 268.00 from holding Koninklijke Ahold Delhaize or generate 8.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Seven i Holdings vs. Koninklijke Ahold Delhaize
Performance |
Timeline |
Seven i Holdings |
Koninklijke Ahold |
Seven I and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Seven I and Koninklijke Ahold
The main advantage of trading using opposite Seven I and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I position performs unexpectedly, Koninklijke Ahold 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 Ahold will offset losses from the drop in Koninklijke Ahold's long position.Seven I vs. Koninklijke Ahold Delhaize | Seven I vs. Weis Markets | Seven I vs. Albertsons Companies | Seven I vs. Dingdong ADR |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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