Correlation Between Elia Group and Fluxys Belgium
Can any of the company-specific risk be diversified away by investing in both Elia Group and Fluxys Belgium 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 Fluxys Belgium 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 Fluxys Belgium, you can compare the effects of market volatilities on Elia Group and Fluxys Belgium 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 Fluxys Belgium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elia Group and Fluxys Belgium.
Diversification Opportunities for Elia Group and Fluxys Belgium
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elia and Fluxys is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Elia Group SANV and Fluxys Belgium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluxys Belgium 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 Fluxys Belgium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluxys Belgium has no effect on the direction of Elia Group i.e., Elia Group and Fluxys Belgium go up and down completely randomly.
Pair Corralation between Elia Group and Fluxys Belgium
Assuming the 90 days trading horizon Elia Group SANV is expected to generate 0.99 times more return on investment than Fluxys Belgium. However, Elia Group SANV is 1.01 times less risky than Fluxys Belgium. It trades about -0.04 of its potential returns per unit of risk. Fluxys Belgium is currently generating about -0.08 per unit of risk. If you would invest 12,484 in Elia Group SANV on August 27, 2024 and sell it today you would lose (3,764) from holding Elia Group SANV or give up 30.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elia Group SANV vs. Fluxys Belgium
Performance |
| Timeline |
| Elia Group SANV |
| Fluxys Belgium |
Elia Group and Fluxys Belgium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elia Group and Fluxys Belgium
The main advantage of trading using opposite Elia Group and Fluxys Belgium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elia Group position performs unexpectedly, Fluxys Belgium 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 Fluxys Belgium will offset losses from the drop in Fluxys Belgium'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 |
| Fluxys Belgium vs. Elia Group SANV | Fluxys Belgium vs. GIMV NV | Fluxys Belgium vs. Cofinimmo SA | Fluxys Belgium vs. TINC Comm VA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Correlations Find global opportunities by holding instruments from different markets |