Correlation Between Cofinimmo and Warehouses Estates
Can any of the company-specific risk be diversified away by investing in both Cofinimmo 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 Cofinimmo and Warehouses Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cofinimmo SA and Warehouses Estates Belgium, you can compare the effects of market volatilities on Cofinimmo 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 Cofinimmo with a short position of Warehouses Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofinimmo and Warehouses Estates.
Diversification Opportunities for Cofinimmo and Warehouses Estates
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cofinimmo and Warehouses is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cofinimmo SA and Warehouses Estates Belgium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouses Estates and Cofinimmo 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 Cofinimmo SA 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 Cofinimmo i.e., Cofinimmo and Warehouses Estates go up and down completely randomly.
Pair Corralation between Cofinimmo and Warehouses Estates
Assuming the 90 days trading horizon Cofinimmo SA is expected to under-perform the Warehouses Estates. In addition to that, Cofinimmo is 1.42 times more volatile than Warehouses Estates Belgium. It trades about -0.12 of its total potential returns per unit of risk. Warehouses Estates Belgium is currently generating about -0.09 per unit of volatility. If you would invest 3,920 in Warehouses Estates Belgium on September 2, 2024 and sell it today you would lose (200.00) from holding Warehouses Estates Belgium or give up 5.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cofinimmo SA vs. Warehouses Estates Belgium
Performance |
| Timeline |
| Cofinimmo SA |
| Warehouses Estates |
Cofinimmo and Warehouses Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cofinimmo and Warehouses Estates
The main advantage of trading using opposite Cofinimmo and Warehouses Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofinimmo 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.| Cofinimmo vs. Aedifica | Cofinimmo vs. Warehouses de Pauw | Cofinimmo vs. Groep Brussel Lambert | Cofinimmo vs. Ackermans Van Haaren |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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