Correlation Between Home Invest and Exmar NV
Can any of the company-specific risk be diversified away by investing in both Home Invest and Exmar NV 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 Exmar NV 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 Exmar NV, you can compare the effects of market volatilities on Home Invest and Exmar NV 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 Exmar NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Invest and Exmar NV.
Diversification Opportunities for Home Invest and Exmar NV
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Home and Exmar is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Home Invest Belgium and Exmar NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exmar NV 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 Exmar NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exmar NV has no effect on the direction of Home Invest i.e., Home Invest and Exmar NV go up and down completely randomly.
Pair Corralation between Home Invest and Exmar NV
Assuming the 90 days trading horizon Home Invest Belgium is expected to under-perform the Exmar NV. But the stock apears to be less risky and, when comparing its historical volatility, Home Invest Belgium is 1.73 times less risky than Exmar NV. The stock trades about -0.23 of its potential returns per unit of risk. The Exmar NV is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 872.00 in Exmar NV on August 25, 2024 and sell it today you would lose (65.00) from holding Exmar NV or give up 7.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Home Invest Belgium vs. Exmar NV
Performance |
| Timeline |
| Home Invest Belgium |
| Exmar NV |
Home Invest and Exmar NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Invest and Exmar NV
The main advantage of trading using opposite Home Invest and Exmar NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Invest position performs unexpectedly, Exmar NV 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 Exmar NV will offset losses from the drop in Exmar NV's long position.| Home Invest vs. Cofinimmo SA | Home Invest vs. Care Property Invest | Home Invest vs. Aedifica | Home Invest vs. Montea CVA |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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