Correlation Between Aalberts Industries and Kendrion

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

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

Diversification Opportunities for Aalberts Industries and Kendrion

0.86

Correlation Coefficient

Aalberts Industries  Kendrion

Very poor diversification

The 3 months correlation between Aalberts and Kendrion is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aalberts Industries NV and Kendrion NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kendrion NV and Aalberts Industries 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 Aalberts Industries NV 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 Aalberts Industries i.e., Aalberts Industries and Kendrion go up and down completely randomly.

Pair Corralation between Aalberts Industries and Kendrion

Assuming the 90 days trading horizon Aalberts Industries is expected to generate 1.19 times less return on investment than Kendrion. In addition to that, Aalberts Industries is 1.25 times more volatile than Kendrion NV. It trades about 0.09 of its total potential returns per unit of risk. Kendrion NV is currently generating about 0.14 per unit of volatility. If you would invest  998.00  in Kendrion NV on April 24, 2025 and sell it today you would earn a total of  118.00  from holding Kendrion NV or generate 11.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Aalberts Industries NV  vs.  Kendrion NV

Aalberts Industries

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aalberts Industries NV are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Aalberts Industries may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Kendrion NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kendrion NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kendrion may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Aalberts Industries and Kendrion

The main advantage of trading using opposite Aalberts Industries and Kendrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aalberts Industries 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 Aalberts Industries NV 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.