Correlation Between Greenyard and Aedifica
Can any of the company-specific risk be diversified away by investing in both Greenyard and Aedifica 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 Greenyard and Aedifica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenyard NV and Aedifica, you can compare the effects of market volatilities on Greenyard and Aedifica 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 Greenyard with a short position of Aedifica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenyard and Aedifica.
Diversification Opportunities for Greenyard and Aedifica
Weak diversification
The 3 months correlation between Greenyard and Aedifica is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Greenyard NV and Aedifica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedifica and Greenyard 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 Greenyard NV are associated (or correlated) with Aedifica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedifica has no effect on the direction of Greenyard i.e., Greenyard and Aedifica go up and down completely randomly.
Pair Corralation between Greenyard and Aedifica
Assuming the 90 days trading horizon Greenyard NV is expected to under-perform the Aedifica. In addition to that, Greenyard is 1.4 times more volatile than Aedifica. It trades about -0.13 of its total potential returns per unit of risk. Aedifica is currently generating about 0.02 per unit of volatility. If you would invest 5,875 in Aedifica on November 8, 2024 and sell it today you would earn a total of 85.00 from holding Aedifica or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenyard NV vs. Aedifica
Performance |
| Timeline |
| Greenyard NV |
| Aedifica |
Greenyard and Aedifica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenyard and Aedifica
The main advantage of trading using opposite Greenyard and Aedifica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenyard position performs unexpectedly, Aedifica 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 Aedifica will offset losses from the drop in Aedifica's long position.| Greenyard vs. Ontex Group NV | Greenyard vs. Exmar NV | Greenyard vs. Melexis NV | Greenyard vs. Biocartis Group NV |
| Aedifica vs. Cofinimmo SA | Aedifica vs. Warehouses de Pauw | Aedifica vs. Care Property Invest | Aedifica vs. Xior Student Housing |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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