Correlation Between Home Invest and Brederode
Can any of the company-specific risk be diversified away by investing in both Home Invest and Brederode 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 Home Invest and Brederode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Invest Belgium and Brederode SA, you can compare the effects of market volatilities on Home Invest and Brederode 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 Home Invest with a short position of Brederode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Invest and Brederode.
Diversification Opportunities for Home Invest and Brederode
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Brederode is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Home Invest Belgium and Brederode SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brederode SA and Home Invest 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 Home Invest Belgium are associated (or correlated) with Brederode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brederode SA has no effect on the direction of Home Invest i.e., Home Invest and Brederode go up and down completely randomly.
Pair Corralation between Home Invest and Brederode
Assuming the 90 days trading horizon Home Invest Belgium is expected to under-perform the Brederode. In addition to that, Home Invest is 1.62 times more volatile than Brederode SA. It trades about 0.0 of its total potential returns per unit of risk. Brederode SA is currently generating about 0.01 per unit of volatility. If you would invest 10,263 in Brederode SA on August 27, 2024 and sell it today you would earn a total of 317.00 from holding Brederode SA or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Invest Belgium vs. Brederode SA
Performance |
| Timeline |
| Home Invest Belgium |
| Brederode SA |
Home Invest and Brederode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Invest and Brederode
The main advantage of trading using opposite Home Invest and Brederode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Invest position performs unexpectedly, Brederode 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 Brederode will offset losses from the drop in Brederode's long position.| Home Invest vs. Cofinimmo SA | Home Invest vs. Care Property Invest | Home Invest vs. Aedifica | Home Invest vs. Montea CVA |
| Brederode vs. Groep Brussel Lambert | Brederode vs. Sofina Socit Anonyme | Brederode vs. Ackermans Van Haaren | Brederode vs. KBC Ancora |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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