Correlation Between Ontex Group and VGP NV
Can any of the company-specific risk be diversified away by investing in both Ontex Group and VGP 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 Ontex Group and VGP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ontex Group NV and VGP NV, you can compare the effects of market volatilities on Ontex Group and VGP 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 Ontex Group with a short position of VGP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ontex Group and VGP NV.
Diversification Opportunities for Ontex Group and VGP NV
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ontex and VGP is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ontex Group NV and VGP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VGP NV and Ontex Group 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 Ontex Group NV are associated (or correlated) with VGP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VGP NV has no effect on the direction of Ontex Group i.e., Ontex Group and VGP NV go up and down completely randomly.
Pair Corralation between Ontex Group and VGP NV
Assuming the 90 days trading horizon Ontex Group NV is expected to generate 0.8 times more return on investment than VGP NV. However, Ontex Group NV is 1.25 times less risky than VGP NV. It trades about 0.03 of its potential returns per unit of risk. VGP NV is currently generating about 0.01 per unit of risk. If you would invest 649.00 in Ontex Group NV on August 26, 2024 and sell it today you would earn a total of 115.00 from holding Ontex Group NV or generate 17.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ontex Group NV vs. VGP NV
Performance |
| Timeline |
| Ontex Group NV |
| VGP NV |
Ontex Group and VGP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ontex Group and VGP NV
The main advantage of trading using opposite Ontex Group and VGP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ontex Group position performs unexpectedly, VGP 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 VGP NV will offset losses from the drop in VGP NV's long position.| Ontex Group vs. Brederode SA | Ontex Group vs. Compagnie du Bois | Ontex Group vs. Ackermans Van Haaren | Ontex Group vs. Sofina Socit Anonyme |
| VGP NV vs. Warehouses de Pauw | VGP NV vs. Sofina Socit Anonyme | VGP NV vs. Aedifica | VGP NV 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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