Correlation Between BEL Small and Belysse Group
Can any of the company-specific risk be diversified away by investing in both BEL Small and Belysse Group 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 BEL Small and Belysse Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEL Small and Belysse Group NV, you can compare the effects of market volatilities on BEL Small and Belysse Group 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 BEL Small with a short position of Belysse Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEL Small and Belysse Group.
Diversification Opportunities for BEL Small and Belysse Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BEL and Belysse is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding BEL Small and Belysse Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belysse Group NV and BEL Small 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 BEL Small are associated (or correlated) with Belysse Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belysse Group NV has no effect on the direction of BEL Small i.e., BEL Small and Belysse Group go up and down completely randomly.
Pair Corralation between BEL Small and Belysse Group
Assuming the 90 days trading horizon BEL Small is expected to under-perform the Belysse Group. But the index apears to be less risky and, when comparing its historical volatility, BEL Small is 5.65 times less risky than Belysse Group. The index trades about -0.07 of its potential returns per unit of risk. The Belysse Group NV is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 70.00 in Belysse Group NV on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Belysse Group NV or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.53% |
| Values | Daily Returns |
BEL Small vs. Belysse Group NV
Performance |
| Timeline |
BEL Small and Belysse Group Volatility Contrast
Predicted Return Density |
| Returns |
BEL Small
Pair trading matchups for BEL Small
Belysse Group NV
Pair trading matchups for Belysse Group
Pair Trading with BEL Small and Belysse Group
The main advantage of trading using opposite BEL Small and Belysse Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEL Small position performs unexpectedly, Belysse Group 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 Belysse Group will offset losses from the drop in Belysse Group's long position.| BEL Small vs. Shurgard Self Storage | BEL Small vs. Retail Estates | BEL Small vs. Vastned Retail Belgium | BEL Small vs. Ion Beam Applications |
| Belysse Group vs. Jensen Group | Belysse Group vs. Deceuninck | Belysse Group vs. Biocartis Group NV | Belysse Group vs. Hyloris Developmentsen 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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