Correlation Between IShares VII and Kendrion

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Can any of the company-specific risk be diversified away by investing in both IShares VII and Kendrion 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 IShares VII and Kendrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares VII Public and Kendrion NV, you can compare the effects of market volatilities on IShares VII and Kendrion 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 IShares VII with a short position of Kendrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares VII and Kendrion.

Diversification Opportunities for IShares VII and Kendrion

ISharesKendrionDiversified AwayISharesKendrionDiversified Away100%
0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between IShares and Kendrion is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding iShares VII Public and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and IShares VII 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 iShares VII Public are associated (or correlated) with Kendrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kendrion NV has no effect on the direction of IShares VII i.e., IShares VII and Kendrion go up and down completely randomly.

Pair Corralation between IShares VII and Kendrion

Assuming the 90 days trading horizon iShares VII Public is expected to generate 0.87 times more return on investment than Kendrion. However, iShares VII Public is 1.15 times less risky than Kendrion. It trades about -0.03 of its potential returns per unit of risk. Kendrion NV is currently generating about -0.14 per unit of risk. If you would invest  13,154  in iShares VII Public on September 27, 2024 and sell it today you would lose (380.00) from holding iShares VII Public or give up 2.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

iShares VII Public  vs.  Kendrion NV

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-50
JavaScript chart by amCharts 3.21.15CMEX KENDR
       Timeline  
iShares VII Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecDec120122124126128130132134136
Kendrion NV 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kendrion NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15NovDecDec1010.210.410.610.81111.211.411.6

IShares VII and Kendrion Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.16-1.63-1.1-0.57-0.050.450.981.512.042.57 0.100.150.20
JavaScript chart by amCharts 3.21.15CMEX KENDR
       Returns  

Pair Trading with IShares VII and Kendrion

The main advantage of trading using opposite IShares VII and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares VII position performs unexpectedly, Kendrion 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 Kendrion will offset losses from the drop in Kendrion's long position.
The idea behind iShares VII Public and Kendrion 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.
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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