Correlation Between Argen X and Groep Brussel
Can any of the company-specific risk be diversified away by investing in both Argen X and Groep Brussel 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 Argen X and Groep Brussel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argen X and Groep Brussel Lambert, you can compare the effects of market volatilities on Argen X and Groep Brussel 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 Argen X with a short position of Groep Brussel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argen X and Groep Brussel.
Diversification Opportunities for Argen X and Groep Brussel
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Argen and Groep is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Argen X and Groep Brussel Lambert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groep Brussel Lambert and Argen X 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 Argen X are associated (or correlated) with Groep Brussel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groep Brussel Lambert has no effect on the direction of Argen X i.e., Argen X and Groep Brussel go up and down completely randomly.
Pair Corralation between Argen X and Groep Brussel
Assuming the 90 days trading horizon Argen X is expected to generate 2.83 times more return on investment than Groep Brussel. However, Argen X is 2.83 times more volatile than Groep Brussel Lambert. It trades about 0.05 of its potential returns per unit of risk. Groep Brussel Lambert is currently generating about -0.02 per unit of risk. If you would invest 37,580 in Argen X on August 26, 2024 and sell it today you would earn a total of 20,680 from holding Argen X or generate 55.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argen X vs. Groep Brussel Lambert
Performance |
| Timeline |
| Argen X |
| Groep Brussel Lambert |
Argen X and Groep Brussel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argen X and Groep Brussel
The main advantage of trading using opposite Argen X and Groep Brussel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argen X position performs unexpectedly, Groep Brussel 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 Groep Brussel will offset losses from the drop in Groep Brussel's long position.The idea behind Argen X and Groep Brussel Lambert 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.| Groep Brussel vs. Ackermans Van Haaren | Groep Brussel vs. Sofina Socit Anonyme | Groep Brussel vs. ageas SANV | Groep Brussel vs. Solvay SA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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