Correlation Between Groep Brussel and Cofinimmo
Can any of the company-specific risk be diversified away by investing in both Groep Brussel and Cofinimmo 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 Cofinimmo 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 Cofinimmo SA, you can compare the effects of market volatilities on Groep Brussel and Cofinimmo 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 Cofinimmo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and Cofinimmo.
Diversification Opportunities for Groep Brussel and Cofinimmo
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Groep and Cofinimmo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Cofinimmo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cofinimmo SA 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 Cofinimmo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cofinimmo SA has no effect on the direction of Groep Brussel i.e., Groep Brussel and Cofinimmo go up and down completely randomly.
Pair Corralation between Groep Brussel and Cofinimmo
Assuming the 90 days trading horizon Groep Brussel Lambert is expected to generate 1.05 times more return on investment than Cofinimmo. However, Groep Brussel is 1.05 times more volatile than Cofinimmo SA. It trades about -0.25 of its potential returns per unit of risk. Cofinimmo SA is currently generating about -0.45 per unit of risk. If you would invest 6,870 in Groep Brussel Lambert on August 24, 2024 and sell it today you would lose (415.00) from holding Groep Brussel Lambert or give up 6.04% 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. Cofinimmo SA
Performance |
| Timeline |
| Groep Brussel Lambert |
| Cofinimmo SA |
Groep Brussel and Cofinimmo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groep Brussel and Cofinimmo
The main advantage of trading using opposite Groep Brussel and Cofinimmo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groep Brussel position performs unexpectedly, Cofinimmo 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 Cofinimmo will offset losses from the drop in Cofinimmo'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 |
| Cofinimmo vs. Aedifica | Cofinimmo vs. Warehouses de Pauw | Cofinimmo vs. Groep Brussel Lambert | Cofinimmo 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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