Correlation Between Sligro Food and Koninklijke Philips

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

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

Diversification Opportunities for Sligro Food and Koninklijke Philips

-0.52

Correlation Coefficient

Sligro Food  Koninklijke Philips

Excellent diversification

The 3 months correlation between Sligro and Koninklijke is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Koninklijke Philips NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Philips and Sligro Food 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 Sligro Food Group are associated (or correlated) with Koninklijke Philips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Philips has no effect on the direction of Sligro Food i.e., Sligro Food and Koninklijke Philips go up and down completely randomly.

Pair Corralation between Sligro Food and Koninklijke Philips

Assuming the 90 days trading horizon Sligro Food Group is expected to generate 1.58 times more return on investment than Koninklijke Philips. However, Sligro Food is 1.58 times more volatile than Koninklijke Philips NV. It trades about 0.03 of its potential returns per unit of risk. Koninklijke Philips NV is currently generating about 0.05 per unit of risk. If you would invest  1,176  in Sligro Food Group on April 20, 2025 and sell it today you would earn a total of  38.00  from holding Sligro Food Group or generate 3.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Sligro Food Group  vs.  Koninklijke Philips NV

Sligro Food Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sligro Food Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sligro Food is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Koninklijke Philips

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Koninklijke Philips NV are ranked lower than 3 (%) 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.

Pair Trading with Sligro Food and Koninklijke Philips

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

The idea behind Sligro Food Group and Koninklijke Philips 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.