Correlation Between Groep Brussel and Banque Nationale
Can any of the company-specific risk be diversified away by investing in both Groep Brussel and Banque Nationale 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 Groep Brussel and Banque Nationale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Groep Brussel Lambert and Banque nationale de, you can compare the effects of market volatilities on Groep Brussel and Banque Nationale 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 Groep Brussel with a short position of Banque Nationale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and Banque Nationale.
Diversification Opportunities for Groep Brussel and Banque Nationale
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Groep and Banque is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Banque nationale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque nationale and Groep Brussel 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 Groep Brussel Lambert are associated (or correlated) with Banque Nationale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque nationale has no effect on the direction of Groep Brussel i.e., Groep Brussel and Banque Nationale go up and down completely randomly.
Pair Corralation between Groep Brussel and Banque Nationale
Assuming the 90 days trading horizon Groep Brussel Lambert is expected to under-perform the Banque Nationale. In addition to that, Groep Brussel is 1.08 times more volatile than Banque nationale de. It trades about -0.25 of its total potential returns per unit of risk. Banque nationale de is currently generating about -0.11 per unit of volatility. If you would invest 42,100 in Banque nationale de on August 24, 2024 and sell it today you would lose (1,100) from holding Banque nationale de or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groep Brussel Lambert vs. Banque nationale de
Performance |
| Timeline |
| Groep Brussel Lambert |
| Banque nationale |
Groep Brussel and Banque Nationale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groep Brussel and Banque Nationale
The main advantage of trading using opposite Groep Brussel and Banque Nationale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groep Brussel position performs unexpectedly, Banque Nationale 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 Banque Nationale will offset losses from the drop in Banque Nationale's long position.| Groep Brussel vs. Ackermans Van Haaren | Groep Brussel vs. Sofina Socit Anonyme | Groep Brussel vs. ageas SANV | Groep Brussel vs. Solvay SA |
| Banque Nationale vs. GIMV NV | Banque Nationale vs. Sofina Socit Anonyme | Banque Nationale vs. Groep Brussel Lambert | Banque Nationale vs. Tubize Fin |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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