Correlation Between BEL Small and Smartphoto Group
Can any of the company-specific risk be diversified away by investing in both BEL Small and Smartphoto 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 Smartphoto 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 Smartphoto Group NV, you can compare the effects of market volatilities on BEL Small and Smartphoto 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 Smartphoto Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEL Small and Smartphoto Group.
Diversification Opportunities for BEL Small and Smartphoto Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between BEL and Smartphoto is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding BEL Small and Smartphoto Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartphoto Group 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 Smartphoto Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartphoto Group has no effect on the direction of BEL Small i.e., BEL Small and Smartphoto Group go up and down completely randomly.
Pair Corralation between BEL Small and Smartphoto Group
Assuming the 90 days trading horizon BEL Small is expected to under-perform the Smartphoto Group. But the index apears to be less risky and, when comparing its historical volatility, BEL Small is 1.17 times less risky than Smartphoto Group. The index trades about -0.53 of its potential returns per unit of risk. The Smartphoto Group NV is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 2,480 in Smartphoto Group NV on September 2, 2024 and sell it today you would lose (70.00) from holding Smartphoto Group NV or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEL Small vs. Smartphoto Group NV
Performance |
| Timeline |
BEL Small and Smartphoto Group Volatility Contrast
Predicted Return Density |
| Returns |
BEL Small
Pair trading matchups for BEL Small
Smartphoto Group NV
Pair trading matchups for Smartphoto Group
Pair Trading with BEL Small and Smartphoto Group
The main advantage of trading using opposite BEL Small and Smartphoto Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEL Small position performs unexpectedly, Smartphoto 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 Smartphoto Group will offset losses from the drop in Smartphoto Group's long position.| BEL Small vs. Onward Medical NV | BEL Small vs. Home Invest Belgium | BEL Small vs. Retail Estates | BEL Small vs. Vastned Retail Belgium |
| Smartphoto Group vs. EVS Broadcast Equipment | Smartphoto Group vs. Tessenderlo | Smartphoto Group vs. Deceuninck | Smartphoto Group vs. Sipef NV |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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