Correlation Between Koninklijke Philips and ASR Nederland

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

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

Diversification Opportunities for Koninklijke Philips and ASR Nederland

-0.02

Correlation Coefficient

Koninklijke Philips  ASR Nederland

Good diversification

The 3 months correlation between Koninklijke and ASR is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Philips NV and ASR Nederland NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASR Nederland NV and Koninklijke Philips 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 Koninklijke Philips NV are associated (or correlated) with ASR Nederland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASR Nederland NV has no effect on the direction of Koninklijke Philips i.e., Koninklijke Philips and ASR Nederland go up and down completely randomly.

Pair Corralation between Koninklijke Philips and ASR Nederland

Assuming the 90 days trading horizon Koninklijke Philips is expected to generate 5.1 times less return on investment than ASR Nederland. In addition to that, Koninklijke Philips is 2.35 times more volatile than ASR Nederland NV. It trades about 0.02 of its total potential returns per unit of risk. ASR Nederland NV is currently generating about 0.27 per unit of volatility. If you would invest  5,174  in ASR Nederland NV on April 23, 2025 and sell it today you would earn a total of  604.00  from holding ASR Nederland NV or generate 11.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Koninklijke Philips NV  vs.  ASR Nederland NV

Koninklijke Philips

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Koninklijke Philips NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Koninklijke Philips is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ASR Nederland NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ASR Nederland NV are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, ASR Nederland may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Koninklijke Philips and ASR Nederland

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

The idea behind Koninklijke Philips NV and ASR Nederland 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.