Correlation Between Bpost NV and Viohalco
Can any of the company-specific risk be diversified away by investing in both Bpost NV and Viohalco 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 Bpost NV and Viohalco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bpost NV and Viohalco SA, you can compare the effects of market volatilities on Bpost NV and Viohalco 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 Bpost NV with a short position of Viohalco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bpost NV and Viohalco.
Diversification Opportunities for Bpost NV and Viohalco
Poor diversification
The 3 months correlation between Bpost and Viohalco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bpost NV and Viohalco SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viohalco SA and Bpost NV 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 Bpost NV are associated (or correlated) with Viohalco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viohalco SA has no effect on the direction of Bpost NV i.e., Bpost NV and Viohalco go up and down completely randomly.
Pair Corralation between Bpost NV and Viohalco
Assuming the 90 days trading horizon Bpost NV is expected to under-perform the Viohalco. In addition to that, Bpost NV is 1.05 times more volatile than Viohalco SA. It trades about -0.07 of its total potential returns per unit of risk. Viohalco SA is currently generating about 0.04 per unit of volatility. If you would invest 396.00 in Viohalco SA on September 4, 2024 and sell it today you would earn a total of 136.00 from holding Viohalco SA or generate 34.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bpost NV vs. Viohalco SA
Performance |
| Timeline |
| Bpost NV |
| Viohalco SA |
Bpost NV and Viohalco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bpost NV and Viohalco
The main advantage of trading using opposite Bpost NV and Viohalco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bpost NV position performs unexpectedly, Viohalco 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 Viohalco will offset losses from the drop in Viohalco's long position.| Bpost NV vs. Proximus NV | Bpost NV vs. ageas SANV | Bpost NV vs. Etablissementen Franz Colruyt | Bpost NV vs. KBC Groep NV |
| Viohalco vs. Cenergy Holdings SA | Viohalco vs. Van de Velde | Viohalco vs. NV Bekaert SA | Viohalco vs. Econocom Group SANV |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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