Correlation Between Aedifica and Immobel
Can any of the company-specific risk be diversified away by investing in both Aedifica and Immobel 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 Aedifica and Immobel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedifica and Immobel, you can compare the effects of market volatilities on Aedifica and Immobel 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 Aedifica with a short position of Immobel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedifica and Immobel.
Diversification Opportunities for Aedifica and Immobel
Modest diversification
The 3 months correlation between Aedifica and Immobel is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Aedifica and Immobel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobel and Aedifica 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 Aedifica are associated (or correlated) with Immobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobel has no effect on the direction of Aedifica i.e., Aedifica and Immobel go up and down completely randomly.
Pair Corralation between Aedifica and Immobel
Assuming the 90 days trading horizon Aedifica is expected to generate 0.7 times more return on investment than Immobel. However, Aedifica is 1.43 times less risky than Immobel. It trades about -0.02 of its potential returns per unit of risk. Immobel is currently generating about -0.07 per unit of risk. If you would invest 7,218 in Aedifica on October 25, 2024 and sell it today you would lose (1,548) from holding Aedifica or give up 21.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedifica vs. Immobel
Performance |
| Timeline |
| Aedifica |
| Immobel |
Aedifica and Immobel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedifica and Immobel
The main advantage of trading using opposite Aedifica and Immobel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedifica position performs unexpectedly, Immobel 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 Immobel will offset losses from the drop in Immobel's long position.| Aedifica vs. Cofinimmo SA | Aedifica vs. Warehouses de Pauw | Aedifica vs. Care Property Invest | Aedifica vs. Xior Student Housing |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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