Correlation Between Galapagos and Kinepolis Group
Can any of the company-specific risk be diversified away by investing in both Galapagos and Kinepolis Group 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 Galapagos and Kinepolis Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galapagos NV and Kinepolis Group NV, you can compare the effects of market volatilities on Galapagos and Kinepolis Group 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 Galapagos with a short position of Kinepolis Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galapagos and Kinepolis Group.
Diversification Opportunities for Galapagos and Kinepolis Group
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Galapagos and Kinepolis is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Galapagos NV and Kinepolis Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinepolis Group NV and Galapagos 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 Galapagos NV are associated (or correlated) with Kinepolis Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinepolis Group NV has no effect on the direction of Galapagos i.e., Galapagos and Kinepolis Group go up and down completely randomly.
Pair Corralation between Galapagos and Kinepolis Group
Assuming the 90 days trading horizon Galapagos NV is expected to under-perform the Kinepolis Group. In addition to that, Galapagos is 1.62 times more volatile than Kinepolis Group NV. It trades about -0.06 of its total potential returns per unit of risk. Kinepolis Group NV is currently generating about 0.01 per unit of volatility. If you would invest 3,875 in Kinepolis Group NV on September 25, 2024 and sell it today you would earn a total of 5.00 from holding Kinepolis Group NV or generate 0.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Galapagos NV vs. Kinepolis Group NV
Performance |
Timeline |
Galapagos NV |
Kinepolis Group NV |
Galapagos and Kinepolis Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Galapagos and Kinepolis Group
The main advantage of trading using opposite Galapagos and Kinepolis Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galapagos position performs unexpectedly, Kinepolis Group 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 Kinepolis Group will offset losses from the drop in Kinepolis Group's long position.Galapagos vs. Argen X | Galapagos vs. Pharming Group NV | Galapagos vs. Barco NV | Galapagos vs. Biocartis Group NV |
Kinepolis Group vs. ageas SANV | Kinepolis Group vs. KBC Ancora | Kinepolis Group vs. UCB SA | Kinepolis Group vs. Nyrstar NV |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |