Correlation Between BEL Small and Warehouses Estates
Can any of the company-specific risk be diversified away by investing in both BEL Small and Warehouses Estates 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 Warehouses Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BEL Small and Warehouses Estates Belgium, you can compare the effects of market volatilities on BEL Small and Warehouses Estates 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 Warehouses Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEL Small and Warehouses Estates.
Diversification Opportunities for BEL Small and Warehouses Estates
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BEL and Warehouses is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding BEL Small and Warehouses Estates Belgium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouses Estates 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 Warehouses Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warehouses Estates has no effect on the direction of BEL Small i.e., BEL Small and Warehouses Estates go up and down completely randomly.
Pair Corralation between BEL Small and Warehouses Estates
Assuming the 90 days trading horizon BEL Small is expected to under-perform the Warehouses Estates. But the index apears to be less risky and, when comparing its historical volatility, BEL Small is 1.41 times less risky than Warehouses Estates. The index trades about -0.05 of its potential returns per unit of risk. The Warehouses Estates Belgium is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,517 in Warehouses Estates Belgium on September 2, 2024 and sell it today you would earn a total of 203.00 from holding Warehouses Estates Belgium or generate 5.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
BEL Small vs. Warehouses Estates Belgium
Performance |
| Timeline |
BEL Small and Warehouses Estates Volatility Contrast
Predicted Return Density |
| Returns |
BEL Small
Pair trading matchups for BEL Small
Warehouses Estates Belgium
Pair trading matchups for Warehouses Estates
Pair Trading with BEL Small and Warehouses Estates
The main advantage of trading using opposite BEL Small and Warehouses Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEL Small position performs unexpectedly, Warehouses Estates 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 Warehouses Estates will offset losses from the drop in Warehouses Estates' 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 |
| Warehouses Estates vs. Aedifica | Warehouses Estates vs. Cofinimmo SA | Warehouses Estates vs. VGP NV | Warehouses Estates vs. Sofina Socit Anonyme |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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