Correlation Between Investor and Groep Brussel
Can any of the company-specific risk be diversified away by investing in both Investor and Groep Brussel 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 Investor and Groep Brussel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB ser and Groep Brussel Lambert, you can compare the effects of market volatilities on Investor and Groep Brussel 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 Investor with a short position of Groep Brussel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Groep Brussel.
Diversification Opportunities for Investor and Groep Brussel
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Investor and Groep is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB ser and Groep Brussel Lambert in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Groep Brussel Lambert and Investor 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 Investor AB ser are associated (or correlated) with Groep Brussel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Groep Brussel Lambert has no effect on the direction of Investor i.e., Investor and Groep Brussel go up and down completely randomly.
Pair Corralation between Investor and Groep Brussel
Assuming the 90 days horizon Investor AB ser is expected to generate 0.45 times more return on investment than Groep Brussel. However, Investor AB ser is 2.22 times less risky than Groep Brussel. It trades about 0.01 of its potential returns per unit of risk. Groep Brussel Lambert is currently generating about -0.05 per unit of risk. If you would invest 2,728 in Investor AB ser on September 12, 2024 and sell it today you would lose (3.00) from holding Investor AB ser or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investor AB ser vs. Groep Brussel Lambert
Performance |
| Timeline |
| Investor AB ser |
| Groep Brussel Lambert |
Investor and Groep Brussel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Groep Brussel
The main advantage of trading using opposite Investor and Groep Brussel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor position performs unexpectedly, Groep Brussel 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 Groep Brussel will offset losses from the drop in Groep Brussel's long position.| Investor vs. Nuveen Global High | Investor vs. New America High | Investor vs. Brookfield Business Corp | Investor vs. Elysee Development Corp |
| Groep Brussel vs. Carlyle Secured Lending | Groep Brussel vs. Sixth Street Specialty | Groep Brussel vs. Golub Capital BDC | Groep Brussel vs. Fidus Investment Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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