Correlation Between Montea CVA and Bpost NV
Can any of the company-specific risk be diversified away by investing in both Montea CVA and Bpost 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 Montea CVA and Bpost NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Montea CVA and Bpost NV, you can compare the effects of market volatilities on Montea CVA and Bpost 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 Montea CVA with a short position of Bpost NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Montea CVA and Bpost NV.
Diversification Opportunities for Montea CVA and Bpost NV
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Montea and Bpost is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Montea CVA and Bpost NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bpost NV and Montea CVA 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 Montea CVA are associated (or correlated) with Bpost NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bpost NV has no effect on the direction of Montea CVA i.e., Montea CVA and Bpost NV go up and down completely randomly.
Pair Corralation between Montea CVA and Bpost NV
Assuming the 90 days trading horizon Montea CVA is expected to generate 0.86 times more return on investment than Bpost NV. However, Montea CVA is 1.16 times less risky than Bpost NV. It trades about 0.0 of its potential returns per unit of risk. Bpost NV is currently generating about -0.55 per unit of risk. If you would invest 6,700 in Montea CVA on September 1, 2024 and sell it today you would lose (30.00) from holding Montea CVA or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Montea CVA vs. Bpost NV
Performance |
| Timeline |
| Montea CVA |
| Bpost NV |
Montea CVA and Bpost NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Montea CVA and Bpost NV
The main advantage of trading using opposite Montea CVA and Bpost NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Montea CVA position performs unexpectedly, Bpost 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 Bpost NV will offset losses from the drop in Bpost NV's long position.| Montea CVA vs. Home Invest Belgium | Montea CVA vs. Retail Estates | Montea CVA vs. Keyware Technologies NV | Montea CVA vs. Vastned Retail Belgium |
| Bpost NV vs. Proximus NV | Bpost NV vs. ageas SANV | Bpost NV vs. Etablissementen Franz Colruyt | Bpost NV vs. KBC Groep NV |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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