Correlation Between Groep Brussel and HAL Trust
Can any of the company-specific risk be diversified away by investing in both Groep Brussel and HAL Trust 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 HAL Trust 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 HAL Trust, you can compare the effects of market volatilities on Groep Brussel and HAL Trust 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 HAL Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and HAL Trust.
Diversification Opportunities for Groep Brussel and HAL Trust
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Groep and HAL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and HAL Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAL Trust 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 HAL Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAL Trust has no effect on the direction of Groep Brussel i.e., Groep Brussel and HAL Trust go up and down completely randomly.
Pair Corralation between Groep Brussel and HAL Trust
Assuming the 90 days trading horizon Groep Brussel Lambert is expected to under-perform the HAL Trust. But the stock apears to be less risky and, when comparing its historical volatility, Groep Brussel Lambert is 1.02 times less risky than HAL Trust. The stock trades about -0.02 of its potential returns per unit of risk. The HAL Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,614 in HAL Trust on August 27, 2024 and sell it today you would earn a total of 26.00 from holding HAL Trust or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groep Brussel Lambert vs. HAL Trust
Performance |
| Timeline |
| Groep Brussel Lambert |
| HAL Trust |
Groep Brussel and HAL Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groep Brussel and HAL Trust
The main advantage of trading using opposite Groep Brussel and HAL Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groep Brussel position performs unexpectedly, HAL Trust 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 HAL Trust will offset losses from the drop in HAL Trust'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 |
| HAL Trust vs. Ackermans Van Haaren | HAL Trust vs. Koninklijke Vopak NV | HAL Trust vs. Groep Brussel Lambert | HAL Trust vs. Sofina Socit Anonyme |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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