Correlation Between Kinepolis Group and Melexis NV

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

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

Diversification Opportunities for Kinepolis Group and Melexis NV

0.69

Correlation Coefficient

Kinepolis Group  Melexis NV

Poor diversification

The 3 months correlation between Kinepolis and Melexis is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kinepolis Group NV and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV and Kinepolis Group 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 Kinepolis Group NV are associated (or correlated) with Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of Kinepolis Group i.e., Kinepolis Group and Melexis NV go up and down completely randomly.

Pair Corralation between Kinepolis Group and Melexis NV

Assuming the 90 days trading horizon Kinepolis Group NV is expected to generate 0.72 times more return on investment than Melexis NV. However, Kinepolis Group NV is 1.38 times less risky than Melexis NV. It trades about 0.11 of its potential returns per unit of risk. Melexis NV is currently generating about 0.01 per unit of risk. If you would invest  3,750  in Kinepolis Group NV on September 22, 2024 and sell it today you would earn a total of  120.00  from holding Kinepolis Group NV or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

Kinepolis Group NV  vs.  Melexis NV

Kinepolis Group NV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kinepolis Group NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kinepolis Group is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Melexis NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Melexis NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kinepolis Group and Melexis NV

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

The idea behind Kinepolis Group NV and Melexis 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..