Correlation Between Etablissementen Franz and QRF SCA
Can any of the company-specific risk be diversified away by investing in both Etablissementen Franz and QRF SCA 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 QRF SCA 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 QRF SCA, you can compare the effects of market volatilities on Etablissementen Franz and QRF SCA 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 QRF SCA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etablissementen Franz and QRF SCA.
Diversification Opportunities for Etablissementen Franz and QRF SCA
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Etablissementen and QRF is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Etablissementen Franz Colruyt and QRF SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QRF SCA 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 QRF SCA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QRF SCA has no effect on the direction of Etablissementen Franz i.e., Etablissementen Franz and QRF SCA go up and down completely randomly.
Pair Corralation between Etablissementen Franz and QRF SCA
Assuming the 90 days trading horizon Etablissementen Franz Colruyt is expected to generate 0.82 times more return on investment than QRF SCA. However, Etablissementen Franz Colruyt is 1.22 times less risky than QRF SCA. It trades about 0.01 of its potential returns per unit of risk. QRF SCA is currently generating about -0.01 per unit of risk. If you would invest 3,624 in Etablissementen Franz Colruyt on November 1, 2024 and sell it today you would earn a total of 2.00 from holding Etablissementen Franz Colruyt or generate 0.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etablissementen Franz Colruyt vs. QRF SCA
Performance |
| Timeline |
| Etablissementen Franz |
| QRF SCA |
Etablissementen Franz and QRF SCA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etablissementen Franz and QRF SCA
The main advantage of trading using opposite Etablissementen Franz and QRF SCA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etablissementen Franz position performs unexpectedly, QRF SCA 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 QRF SCA will offset losses from the drop in QRF SCA's long position.| Etablissementen Franz vs. Sofina Socit Anonyme | Etablissementen Franz vs. Ackermans Van Haaren | Etablissementen Franz vs. Melexis NV | Etablissementen Franz vs. DIeteren Group SA |
| QRF SCA vs. Retail Estates | QRF SCA vs. Wereldhav B Sicafi | QRF SCA vs. Vastned Retail Belgium | QRF SCA vs. Home Invest Belgium |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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