Correlation Between Klepierre and NSI NV

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

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

Diversification Opportunities for Klepierre and NSI NV

0.69

Correlation Coefficient

Klepierre  NSI NV

Poor diversification

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

Pair Corralation between Klepierre and NSI NV

Assuming the 90 days horizon Klepierre SA is expected to generate 1.14 times more return on investment than NSI NV. However, Klepierre is 1.14 times more volatile than NSI NV. It trades about -0.09 of its potential returns per unit of risk. NSI NV is currently generating about -0.15 per unit of risk. If you would invest  2,930  in Klepierre SA on September 19, 2024 and sell it today you would lose (152.00) from holding Klepierre SA or give up 5.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Klepierre SA  vs.  NSI NV

Klepierre SA

Risk-Adjusted Performance

0 of 100

Very Weak

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

NSI NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSI NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Klepierre and NSI NV

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

The idea behind Klepierre SA and NSI 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.