Correlation Between Elia Group and Belysse Group
Can any of the company-specific risk be diversified away by investing in both Elia Group and Belysse Group 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 Elia Group and Belysse Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elia Group SANV and Belysse Group NV, you can compare the effects of market volatilities on Elia Group and Belysse Group 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 Elia Group with a short position of Belysse Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elia Group and Belysse Group.
Diversification Opportunities for Elia Group and Belysse Group
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elia and Belysse is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Elia Group SANV and Belysse Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belysse Group NV and Elia 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 Elia Group SANV are associated (or correlated) with Belysse Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belysse Group NV has no effect on the direction of Elia Group i.e., Elia Group and Belysse Group go up and down completely randomly.
Pair Corralation between Elia Group and Belysse Group
Assuming the 90 days trading horizon Elia Group SANV is expected to generate 0.5 times more return on investment than Belysse Group. However, Elia Group SANV is 1.99 times less risky than Belysse Group. It trades about -0.13 of its potential returns per unit of risk. Belysse Group NV is currently generating about -0.17 per unit of risk. If you would invest 9,325 in Elia Group SANV on August 29, 2024 and sell it today you would lose (600.00) from holding Elia Group SANV or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.26% |
| Values | Daily Returns |
Elia Group SANV vs. Belysse Group NV
Performance |
| Timeline |
| Elia Group SANV |
| Belysse Group NV |
Elia Group and Belysse Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elia Group and Belysse Group
The main advantage of trading using opposite Elia Group and Belysse Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elia Group position performs unexpectedly, Belysse Group 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 Belysse Group will offset losses from the drop in Belysse Group's long position.| Elia Group vs. Ackermans Van Haaren | Elia Group vs. Groep Brussel Lambert | Elia Group vs. Sofina Socit Anonyme | Elia Group vs. ageas SANV |
| Belysse Group vs. Biocartis Group NV | Belysse Group vs. Celyad SA | Belysse Group vs. Argen X | Belysse Group vs. Exmar 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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