Correlation Between KBC Groep and Generation Bio
Can any of the company-specific risk be diversified away by investing in both KBC Groep and Generation Bio 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 KBC Groep and Generation Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBC Groep NV and Generation Bio Co, you can compare the effects of market volatilities on KBC Groep and Generation Bio 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 KBC Groep with a short position of Generation Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Groep and Generation Bio.
Diversification Opportunities for KBC Groep and Generation Bio
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KBC and Generation is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding KBC Groep NV and Generation Bio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Bio and KBC Groep 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 KBC Groep NV are associated (or correlated) with Generation Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Bio has no effect on the direction of KBC Groep i.e., KBC Groep and Generation Bio go up and down completely randomly.
Pair Corralation between KBC Groep and Generation Bio
Assuming the 90 days horizon KBC Groep NV is expected to generate 0.24 times more return on investment than Generation Bio. However, KBC Groep NV is 4.09 times less risky than Generation Bio. It trades about 0.07 of its potential returns per unit of risk. Generation Bio Co is currently generating about 0.01 per unit of risk. If you would invest 2,169 in KBC Groep NV on July 21, 2024 and sell it today you would earn a total of 1,550 from holding KBC Groep NV or generate 71.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
KBC Groep NV vs. Generation Bio Co
Performance |
Timeline |
KBC Groep NV |
Generation Bio |
KBC Groep and Generation Bio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KBC Groep and Generation Bio
The main advantage of trading using opposite KBC Groep and Generation Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Groep position performs unexpectedly, Generation Bio 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 Generation Bio will offset losses from the drop in Generation Bio's long position.KBC Groep vs. DBS Group Holdings | KBC Groep vs. United Overseas Bank | KBC Groep vs. Overseas Chinese Banking | KBC Groep vs. China Minsh |
Generation Bio vs. KBC Groep NV | Generation Bio vs. Pfizer Inc | Generation Bio vs. JPMorgan Chase Co | Generation Bio vs. Davis Select Worldwide |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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