Correlation Between HAL Trust and Reinet Investments
Can any of the company-specific risk be diversified away by investing in both HAL Trust and Reinet Investments 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 HAL Trust and Reinet Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAL Trust and Reinet Investments SCA, you can compare the effects of market volatilities on HAL Trust and Reinet Investments 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 HAL Trust with a short position of Reinet Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAL Trust and Reinet Investments.
Diversification Opportunities for HAL Trust and Reinet Investments
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HAL and Reinet is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding HAL Trust and Reinet Investments SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinet Investments SCA and HAL Trust 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 HAL Trust are associated (or correlated) with Reinet Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinet Investments SCA has no effect on the direction of HAL Trust i.e., HAL Trust and Reinet Investments go up and down completely randomly.
Pair Corralation between HAL Trust and Reinet Investments
Assuming the 90 days trading horizon HAL Trust is expected to generate 0.27 times more return on investment than Reinet Investments. However, HAL Trust is 3.73 times less risky than Reinet Investments. It trades about -0.12 of its potential returns per unit of risk. Reinet Investments SCA is currently generating about -0.04 per unit of risk. If you would invest 11,960 in HAL Trust on November 18, 2024 and sell it today you would lose (180.00) from holding HAL Trust or give up 1.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HAL Trust vs. Reinet Investments SCA
Performance |
| Timeline |
| HAL Trust |
| Reinet Investments SCA |
HAL Trust and Reinet Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAL Trust and Reinet Investments
The main advantage of trading using opposite HAL Trust and Reinet Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAL Trust position performs unexpectedly, Reinet Investments 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 Reinet Investments will offset losses from the drop in Reinet Investments' long position.| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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