Correlation Between BEL Small and Tessenderlo
Can any of the company-specific risk be diversified away by investing in both BEL Small and Tessenderlo 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 Tessenderlo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEL Small and Tessenderlo, you can compare the effects of market volatilities on BEL Small and Tessenderlo 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 Tessenderlo. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEL Small and Tessenderlo.
Diversification Opportunities for BEL Small and Tessenderlo
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BEL and Tessenderlo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BEL Small and Tessenderlo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tessenderlo 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 Tessenderlo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tessenderlo has no effect on the direction of BEL Small i.e., BEL Small and Tessenderlo go up and down completely randomly.
Pair Corralation between BEL Small and Tessenderlo
Assuming the 90 days trading horizon BEL Small is expected to generate 0.48 times more return on investment than Tessenderlo. However, BEL Small is 2.1 times less risky than Tessenderlo. It trades about -0.53 of its potential returns per unit of risk. Tessenderlo is currently generating about -0.41 per unit of risk. If you would invest 857,783 in BEL Small on September 1, 2024 and sell it today you would lose (56,545) from holding BEL Small or give up 6.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BEL Small vs. Tessenderlo
Performance |
| Timeline |
BEL Small and Tessenderlo Volatility Contrast
Predicted Return Density |
| Returns |
BEL Small
Pair trading matchups for BEL Small
Tessenderlo
Pair trading matchups for Tessenderlo
Pair Trading with BEL Small and Tessenderlo
The main advantage of trading using opposite BEL Small and Tessenderlo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEL Small position performs unexpectedly, Tessenderlo 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 Tessenderlo will offset losses from the drop in Tessenderlo'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 |
| Tessenderlo vs. Ackermans Van Haaren | Tessenderlo vs. NV Bekaert SA | Tessenderlo vs. Groep Brussel Lambert | Tessenderlo vs. Tubize Fin |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |