Correlation Between Home Invest and Elia Group
Can any of the company-specific risk be diversified away by investing in both Home Invest and Elia Group 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 Elia Group 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 Elia Group SANV, you can compare the effects of market volatilities on Home Invest and Elia Group 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 Elia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Invest and Elia Group.
Diversification Opportunities for Home Invest and Elia Group
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Home and Elia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Home Invest Belgium and Elia Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elia Group SANV 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 Elia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elia Group SANV has no effect on the direction of Home Invest i.e., Home Invest and Elia Group go up and down completely randomly.
Pair Corralation between Home Invest and Elia Group
Assuming the 90 days trading horizon Home Invest Belgium is expected to under-perform the Elia Group. But the stock apears to be less risky and, when comparing its historical volatility, Home Invest Belgium is 1.07 times less risky than Elia Group. The stock trades about -0.29 of its potential returns per unit of risk. The Elia Group SANV is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 9,325 in Elia Group SANV on August 29, 2024 and sell it today you would lose (600.00) from holding Elia Group SANV or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Invest Belgium vs. Elia Group SANV
Performance |
| Timeline |
| Home Invest Belgium |
| Elia Group SANV |
Home Invest and Elia Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Invest and Elia Group
The main advantage of trading using opposite Home Invest and Elia Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Invest position performs unexpectedly, Elia Group 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 Elia Group will offset losses from the drop in Elia Group's long position.| Home Invest vs. Cofinimmo SA | Home Invest vs. Care Property Invest | Home Invest vs. Aedifica | Home Invest vs. Montea CVA |
| Elia Group vs. Ackermans Van Haaren | Elia Group vs. Groep Brussel Lambert | Elia Group vs. Sofina Socit Anonyme | Elia Group vs. ageas SANV |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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