Correlation Between DIeteren Group and Sofina Socit
Can any of the company-specific risk be diversified away by investing in both DIeteren Group and Sofina Socit 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 DIeteren Group and Sofina Socit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIeteren Group SA and Sofina Socit Anonyme, you can compare the effects of market volatilities on DIeteren Group and Sofina Socit 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 DIeteren Group with a short position of Sofina Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIeteren Group and Sofina Socit.
Diversification Opportunities for DIeteren Group and Sofina Socit
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DIeteren and Sofina is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding DIeteren Group SA and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme and DIeteren Group 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 DIeteren Group SA are associated (or correlated) with Sofina Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of DIeteren Group i.e., DIeteren Group and Sofina Socit go up and down completely randomly.
Pair Corralation between DIeteren Group and Sofina Socit
Assuming the 90 days trading horizon DIeteren Group SA is expected to generate 0.9 times more return on investment than Sofina Socit. However, DIeteren Group SA is 1.11 times less risky than Sofina Socit. It trades about 0.03 of its potential returns per unit of risk. Sofina Socit Anonyme is currently generating about 0.01 per unit of risk. If you would invest 17,486 in DIeteren Group SA on August 30, 2024 and sell it today you would earn a total of 2,694 from holding DIeteren Group SA or generate 15.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIeteren Group SA vs. Sofina Socit Anonyme
Performance |
| Timeline |
| DIeteren Group SA |
| Sofina Socit Anonyme |
DIeteren Group and Sofina Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIeteren Group and Sofina Socit
The main advantage of trading using opposite DIeteren Group and Sofina Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIeteren Group position performs unexpectedly, Sofina Socit 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 Sofina Socit will offset losses from the drop in Sofina Socit's long position.| DIeteren Group vs. Ackermans Van Haaren | DIeteren Group vs. Sofina Socit Anonyme | DIeteren Group vs. Groep Brussel Lambert | DIeteren Group vs. Barco NV |
| Sofina Socit vs. KBC Groep NV | Sofina Socit vs. ageas SANV | Sofina Socit vs. Groep Brussel Lambert | Sofina Socit vs. Ackermans Van Haaren |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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