Correlation Between BEL Small and Inclusio Sca
Can any of the company-specific risk be diversified away by investing in both BEL Small and Inclusio Sca 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 Inclusio Sca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEL Small and Inclusio Sca, you can compare the effects of market volatilities on BEL Small and Inclusio Sca 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 Inclusio Sca. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEL Small and Inclusio Sca.
Diversification Opportunities for BEL Small and Inclusio Sca
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BEL and Inclusio is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BEL Small and Inclusio Sca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inclusio Sca 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 Inclusio Sca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inclusio Sca has no effect on the direction of BEL Small i.e., BEL Small and Inclusio Sca go up and down completely randomly.
Pair Corralation between BEL Small and Inclusio Sca
Assuming the 90 days trading horizon BEL Small is expected to under-perform the Inclusio Sca. But the index apears to be less risky and, when comparing its historical volatility, BEL Small is 1.96 times less risky than Inclusio Sca. The index trades about -0.1 of its potential returns per unit of risk. The Inclusio Sca is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,365 in Inclusio Sca on August 31, 2024 and sell it today you would earn a total of 45.00 from holding Inclusio Sca or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
BEL Small vs. Inclusio Sca
Performance |
| Timeline |
BEL Small and Inclusio Sca Volatility Contrast
Predicted Return Density |
| Returns |
BEL Small
Pair trading matchups for BEL Small
Inclusio Sca
Pair trading matchups for Inclusio Sca
Pair Trading with BEL Small and Inclusio Sca
The main advantage of trading using opposite BEL Small and Inclusio Sca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEL Small position performs unexpectedly, Inclusio Sca 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 Inclusio Sca will offset losses from the drop in Inclusio Sca's long position.| BEL Small vs. Vastned Retail Belgium | BEL Small vs. Retail Estates | BEL Small vs. Home Invest Belgium | BEL Small vs. Shurgard Self Storage |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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