Correlation Between Banque Nationale and Care Property
Can any of the company-specific risk be diversified away by investing in both Banque Nationale and Care Property 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 Banque Nationale and Care Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banque nationale de and Care Property Invest, you can compare the effects of market volatilities on Banque Nationale and Care Property 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 Banque Nationale with a short position of Care Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banque Nationale and Care Property.
Diversification Opportunities for Banque Nationale and Care Property
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Banque and Care is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Banque nationale de and Care Property Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Care Property Invest and Banque Nationale 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 Banque nationale de are associated (or correlated) with Care Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Care Property Invest has no effect on the direction of Banque Nationale i.e., Banque Nationale and Care Property go up and down completely randomly.
Pair Corralation between Banque Nationale and Care Property
Assuming the 90 days trading horizon Banque nationale de is expected to generate 0.64 times more return on investment than Care Property. However, Banque nationale de is 1.56 times less risky than Care Property. It trades about -0.07 of its potential returns per unit of risk. Care Property Invest is currently generating about -0.23 per unit of risk. If you would invest 42,600 in Banque nationale de on August 24, 2024 and sell it today you would lose (1,600) from holding Banque nationale de or give up 3.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banque nationale de vs. Care Property Invest
Performance |
| Timeline |
| Banque nationale |
| Care Property Invest |
Banque Nationale and Care Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banque Nationale and Care Property
The main advantage of trading using opposite Banque Nationale and Care Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banque Nationale position performs unexpectedly, Care Property 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 Care Property will offset losses from the drop in Care Property's long position.| Banque Nationale vs. GIMV NV | Banque Nationale vs. Sofina Socit Anonyme | Banque Nationale vs. Groep Brussel Lambert | Banque Nationale vs. NV Bekaert SA |
| Care Property vs. Aedifica | Care Property vs. Cofinimmo SA | Care Property vs. Xior Student Housing | Care Property vs. VGP 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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