Correlation Between GIMV NV and Van De
Can any of the company-specific risk be diversified away by investing in both GIMV NV and Van De 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 Van De into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GIMV NV and Van de Velde, you can compare the effects of market volatilities on GIMV NV and Van De 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 Van De. Check out your portfolio center. Please also check ongoing floating volatility patterns of GIMV NV and Van De.
Diversification Opportunities for GIMV NV and Van De
Good diversification
The 3 months correlation between GIMV and Van is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding GIMV NV and Van de Velde in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Van de Velde 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 Van De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Van de Velde has no effect on the direction of GIMV NV i.e., GIMV NV and Van De go up and down completely randomly.
Pair Corralation between GIMV NV and Van De
Assuming the 90 days trading horizon GIMV NV is expected to generate 0.95 times more return on investment than Van De. However, GIMV NV is 1.05 times less risky than Van De. It trades about 0.01 of its potential returns per unit of risk. Van de Velde is currently generating about -0.01 per unit of risk. If you would invest 3,973 in GIMV NV on August 31, 2024 and sell it today you would earn a total of 82.00 from holding GIMV NV or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GIMV NV vs. Van de Velde
Performance |
| Timeline |
| GIMV NV |
| Van de Velde |
GIMV NV and Van De Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GIMV NV and Van De
The main advantage of trading using opposite GIMV NV and Van De positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GIMV NV position performs unexpectedly, Van De 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 Van De will offset losses from the drop in Van De's long position.| GIMV NV vs. Groep Brussel Lambert | GIMV NV vs. Ackermans Van Haaren | GIMV NV vs. Sofina Socit Anonyme | GIMV NV vs. Brederode SA |
| Van De vs. EVS Broadcast Equipment | Van De vs. NV Bekaert SA | Van De vs. Tessenderlo | Van De vs. Melexis NV |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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