Correlation Between GIMV NV and Texaf SA
Can any of the company-specific risk be diversified away by investing in both GIMV NV and Texaf SA 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 GIMV NV and Texaf SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GIMV NV and Texaf SA, you can compare the effects of market volatilities on GIMV NV and Texaf SA 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 GIMV NV with a short position of Texaf SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GIMV NV and Texaf SA.
Diversification Opportunities for GIMV NV and Texaf SA
Weak diversification
The 3 months correlation between GIMV and Texaf is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding GIMV NV and Texaf SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texaf SA and GIMV NV 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 GIMV NV are associated (or correlated) with Texaf SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texaf SA has no effect on the direction of GIMV NV i.e., GIMV NV and Texaf SA go up and down completely randomly.
Pair Corralation between GIMV NV and Texaf SA
Assuming the 90 days trading horizon GIMV NV is expected to generate 1.13 times more return on investment than Texaf SA. However, GIMV NV is 1.13 times more volatile than Texaf SA. It trades about 0.0 of its potential returns per unit of risk. Texaf SA is currently generating about -0.06 per unit of risk. If you would invest 4,075 in GIMV NV on September 3, 2024 and sell it today you would lose (20.00) from holding GIMV NV or give up 0.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GIMV NV vs. Texaf SA
Performance |
| Timeline |
| GIMV NV |
| Texaf SA |
GIMV NV and Texaf SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GIMV NV and Texaf SA
The main advantage of trading using opposite GIMV NV and Texaf SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GIMV NV position performs unexpectedly, Texaf SA 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 Texaf SA will offset losses from the drop in Texaf SA's long position.| GIMV NV vs. Brederode SA | GIMV NV vs. Groep Brussel Lambert | GIMV NV vs. Sofina Socit Anonyme | GIMV NV 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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