Correlation Between Koninklijke Vopak and Interroll Holding

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

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

Diversification Opportunities for Koninklijke Vopak and Interroll Holding

0.56

Correlation Coefficient

Koninklijke Vopak  Interroll Holding

Very weak diversification

The 3 months correlation between Koninklijke and Interroll is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Vopak NV and Interroll Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interroll Holding and Koninklijke Vopak 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 Vopak NV are associated (or correlated) with Interroll Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interroll Holding has no effect on the direction of Koninklijke Vopak i.e., Koninklijke Vopak and Interroll Holding go up and down completely randomly.

Pair Corralation between Koninklijke Vopak and Interroll Holding

Assuming the 90 days trading horizon Koninklijke Vopak is expected to generate 2.13 times less return on investment than Interroll Holding. But when comparing it to its historical volatility, Koninklijke Vopak NV is 2.73 times less risky than Interroll Holding. It trades about 0.3 of its potential returns per unit of risk. Interroll Holding AG is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  169,229  in Interroll Holding AG on April 23, 2025 and sell it today you would earn a total of  61,771  from holding Interroll Holding AG or generate 36.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Koninklijke Vopak NV  vs.  Interroll Holding AG

Koninklijke Vopak

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Koninklijke Vopak NV are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking signals, Koninklijke Vopak unveiled solid returns over the last few months and may actually be approaching a breakup point.

Interroll Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Interroll Holding AG are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Interroll Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Koninklijke Vopak and Interroll Holding

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

The idea behind Koninklijke Vopak NV and Interroll Holding AG 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.