Correlation Between Campine and Proximus
Can any of the company-specific risk be diversified away by investing in both Campine and Proximus 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 Campine and Proximus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Campine and Proximus NV, you can compare the effects of market volatilities on Campine and Proximus 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 Campine with a short position of Proximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Campine and Proximus.
Diversification Opportunities for Campine and Proximus
Pay attention - limited upside
The 3 months correlation between Campine and Proximus is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Campine and Proximus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proximus NV and Campine 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 Campine are associated (or correlated) with Proximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proximus NV has no effect on the direction of Campine i.e., Campine and Proximus go up and down completely randomly.
Pair Corralation between Campine and Proximus
Assuming the 90 days trading horizon Campine is expected to generate 1.22 times more return on investment than Proximus. However, Campine is 1.22 times more volatile than Proximus NV. It trades about 0.05 of its potential returns per unit of risk. Proximus NV is currently generating about 0.0 per unit of risk. If you would invest 8,450 in Campine on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Campine or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Campine vs. Proximus NV
Performance |
| Timeline |
| Campine |
| Proximus NV |
Campine and Proximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Campine and Proximus
The main advantage of trading using opposite Campine and Proximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Campine position performs unexpectedly, Proximus 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 Proximus will offset losses from the drop in Proximus' long position.| Campine vs. Miko NV | Campine vs. Tessenderlo | Campine vs. Van de Velde | Campine vs. EVS Broadcast Equipment |
| Proximus vs. Bpost NV | Proximus vs. Etablissementen Franz Colruyt | Proximus vs. ageas SANV | Proximus vs. KBC Groep 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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