Correlation Between Brederode and Elia Group
Can any of the company-specific risk be diversified away by investing in both Brederode and Elia 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 Brederode and Elia Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brederode SA and Elia Group SANV, you can compare the effects of market volatilities on Brederode and Elia 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 Brederode with a short position of Elia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brederode and Elia Group.
Diversification Opportunities for Brederode and Elia Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Brederode and Elia is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Brederode SA and Elia Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elia Group SANV and Brederode 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 Brederode SA are associated (or correlated) with Elia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elia Group SANV has no effect on the direction of Brederode i.e., Brederode and Elia Group go up and down completely randomly.
Pair Corralation between Brederode and Elia Group
Assuming the 90 days trading horizon Brederode SA is expected to generate 0.64 times more return on investment than Elia Group. However, Brederode SA is 1.56 times less risky than Elia Group. It trades about 0.02 of its potential returns per unit of risk. Elia Group SANV is currently generating about -0.26 per unit of risk. If you would invest 10,680 in Brederode SA on September 18, 2024 and sell it today you would earn a total of 40.00 from holding Brederode SA or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brederode SA vs. Elia Group SANV
Performance |
| Timeline |
| Brederode SA |
| Elia Group SANV |
Brederode and Elia Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brederode and Elia Group
The main advantage of trading using opposite Brederode and Elia Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brederode position performs unexpectedly, Elia 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 Elia Group will offset losses from the drop in Elia Group's long position.| Brederode vs. GIMV NV | Brederode vs. Ackermans Van Haaren | Brederode vs. Groep Brussel Lambert | Brederode vs. Sofina Socit Anonyme |
| Elia Group vs. Ackermans Van Haaren | Elia Group vs. Groep Brussel Lambert | Elia Group vs. Sofina Socit Anonyme | Elia Group vs. ageas 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |