Correlation Between Groep Brussel and Ontex Group
Can any of the company-specific risk be diversified away by investing in both Groep Brussel and Ontex 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 Groep Brussel and Ontex Group 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 Ontex Group NV, you can compare the effects of market volatilities on Groep Brussel and Ontex 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 Groep Brussel with a short position of Ontex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Groep Brussel and Ontex Group.
Diversification Opportunities for Groep Brussel and Ontex Group
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Groep and Ontex is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Groep Brussel Lambert and Ontex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ontex Group NV 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 Ontex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ontex Group NV has no effect on the direction of Groep Brussel i.e., Groep Brussel and Ontex Group go up and down completely randomly.
Pair Corralation between Groep Brussel and Ontex Group
Assuming the 90 days trading horizon Groep Brussel is expected to generate 3.07 times less return on investment than Ontex Group. But when comparing it to its historical volatility, Groep Brussel Lambert is 1.74 times less risky than Ontex Group. It trades about 0.2 of its potential returns per unit of risk. Ontex Group NV is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 735.00 in Ontex Group NV on September 13, 2024 and sell it today you would earn a total of 65.00 from holding Ontex Group NV or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Groep Brussel Lambert vs. Ontex Group NV
Performance |
| Timeline |
| Groep Brussel Lambert |
| Ontex Group NV |
Groep Brussel and Ontex Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Groep Brussel and Ontex Group
The main advantage of trading using opposite Groep Brussel and Ontex Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Groep Brussel position performs unexpectedly, Ontex 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 Ontex Group will offset losses from the drop in Ontex Group'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 |
| Ontex Group vs. Bpost NV | Ontex Group vs. Barco NV | Ontex Group vs. Biocartis Group NV | Ontex Group vs. ageas SANV |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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