Correlation Between Immobel and Aedifica
Can any of the company-specific risk be diversified away by investing in both Immobel 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 Immobel and Aedifica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Immobel and Aedifica, you can compare the effects of market volatilities on Immobel 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 Immobel with a short position of Aedifica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Immobel and Aedifica.
Diversification Opportunities for Immobel and Aedifica
Poor diversification
The 3 months correlation between Immobel and Aedifica is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Immobel and Aedifica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedifica and Immobel 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 Immobel 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 Immobel i.e., Immobel and Aedifica go up and down completely randomly.
Pair Corralation between Immobel and Aedifica
Assuming the 90 days trading horizon Immobel is expected to under-perform the Aedifica. In addition to that, Immobel is 1.2 times more volatile than Aedifica. It trades about -0.27 of its total potential returns per unit of risk. Aedifica is currently generating about -0.09 per unit of volatility. If you would invest 5,975 in Aedifica on August 30, 2024 and sell it today you would lose (165.00) from holding Aedifica or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Immobel vs. Aedifica
Performance |
| Timeline |
| Immobel |
| Aedifica |
Immobel and Aedifica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Immobel and Aedifica
The main advantage of trading using opposite Immobel and Aedifica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Immobel 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.The idea behind Immobel and Aedifica pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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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