Correlation Between Etablissementen Franz and Groep Brussel
Can any of the company-specific risk be diversified away by investing in both Etablissementen Franz and Groep Brussel 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 Etablissementen Franz and Groep Brussel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etablissementen Franz Colruyt and Groep Brussel Lambert, you can compare the effects of market volatilities on Etablissementen Franz and Groep Brussel 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 Etablissementen Franz with a short position of Groep Brussel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissementen Franz and Groep Brussel.
Diversification Opportunities for Etablissementen Franz and Groep Brussel
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Etablissementen and Groep is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Etablissementen Franz Colruyt and Groep Brussel Lambert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groep Brussel Lambert and Etablissementen Franz 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 Etablissementen Franz Colruyt are associated (or correlated) with Groep Brussel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groep Brussel Lambert has no effect on the direction of Etablissementen Franz i.e., Etablissementen Franz and Groep Brussel go up and down completely randomly.
Pair Corralation between Etablissementen Franz and Groep Brussel
Assuming the 90 days trading horizon Etablissementen Franz Colruyt is expected to under-perform the Groep Brussel. In addition to that, Etablissementen Franz is 2.81 times more volatile than Groep Brussel Lambert. It trades about -0.28 of its total potential returns per unit of risk. Groep Brussel Lambert is currently generating about 0.06 per unit of volatility. If you would invest 6,555 in Groep Brussel Lambert on October 26, 2024 and sell it today you would earn a total of 100.00 from holding Groep Brussel Lambert or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etablissementen Franz Colruyt vs. Groep Brussel Lambert
Performance |
| Timeline |
| Etablissementen Franz |
| Groep Brussel Lambert |
Etablissementen Franz and Groep Brussel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etablissementen Franz and Groep Brussel
The main advantage of trading using opposite Etablissementen Franz and Groep Brussel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etablissementen Franz position performs unexpectedly, Groep Brussel 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 Groep Brussel will offset losses from the drop in Groep Brussel's long position.| Etablissementen Franz vs. KBC Groep NV | Etablissementen Franz vs. Proximus NV | Etablissementen Franz vs. ageas SANV | Etablissementen Franz vs. Solvay SA |
| Groep Brussel vs. Ackermans Van Haaren | Groep Brussel vs. Sofina Socit Anonyme | Groep Brussel vs. ageas SANV | Groep Brussel vs. Solvay SA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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