Correlation Between Blockchain Group and Vergnet
Can any of the company-specific risk be diversified away by investing in both Blockchain Group and Vergnet 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 Blockchain Group and Vergnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blockchain Group SA and Vergnet, you can compare the effects of market volatilities on Blockchain Group and Vergnet 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 Blockchain Group with a short position of Vergnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blockchain Group and Vergnet.
Diversification Opportunities for Blockchain Group and Vergnet
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Blockchain and Vergnet is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Group SA and Vergnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vergnet and Blockchain Group 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 Blockchain Group SA are associated (or correlated) with Vergnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vergnet has no effect on the direction of Blockchain Group i.e., Blockchain Group and Vergnet go up and down completely randomly.
Pair Corralation between Blockchain Group and Vergnet
Assuming the 90 days trading horizon Blockchain Group SA is expected to generate 1.78 times more return on investment than Vergnet. However, Blockchain Group is 1.78 times more volatile than Vergnet. It trades about 0.32 of its potential returns per unit of risk. Vergnet is currently generating about -0.4 per unit of risk. If you would invest 15.00 in Blockchain Group SA on September 2, 2024 and sell it today you would earn a total of 13.00 from holding Blockchain Group SA or generate 86.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blockchain Group SA vs. Vergnet
Performance |
| Timeline |
| Blockchain Group |
| Vergnet |
Blockchain Group and Vergnet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blockchain Group and Vergnet
The main advantage of trading using opposite Blockchain Group and Vergnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blockchain Group position performs unexpectedly, Vergnet 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 Vergnet will offset losses from the drop in Vergnet's long position.| Blockchain Group vs. Manitou BF SA | Blockchain Group vs. Ossiam Minimum Variance | Blockchain Group vs. Granite 3x LVMH | Blockchain Group vs. 21Shares Polkadot ETP |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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