Correlation Between Crescent and Home Invest
Can any of the company-specific risk be diversified away by investing in both Crescent and Home Invest 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 Crescent and Home Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent NV and Home Invest Belgium, you can compare the effects of market volatilities on Crescent and Home Invest 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 Crescent with a short position of Home Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent and Home Invest.
Diversification Opportunities for Crescent and Home Invest
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crescent and Home is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Crescent NV and Home Invest Belgium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Invest Belgium and Crescent 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 Crescent NV are associated (or correlated) with Home Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Invest Belgium has no effect on the direction of Crescent i.e., Crescent and Home Invest go up and down completely randomly.
Pair Corralation between Crescent and Home Invest
Assuming the 90 days trading horizon Crescent NV is expected to generate 2.26 times more return on investment than Home Invest. However, Crescent is 2.26 times more volatile than Home Invest Belgium. It trades about 0.17 of its potential returns per unit of risk. Home Invest Belgium is currently generating about 0.01 per unit of risk. If you would invest 1.00 in Crescent NV on September 18, 2024 and sell it today you would earn a total of 0.12 from holding Crescent NV or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent NV vs. Home Invest Belgium
Performance |
| Timeline |
| Crescent NV |
| Home Invest Belgium |
Crescent and Home Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent and Home Invest
The main advantage of trading using opposite Crescent and Home Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent position performs unexpectedly, Home Invest 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 Home Invest will offset losses from the drop in Home Invest's long position.| Crescent vs. EVS Broadcast Equipment | Crescent vs. Exmar NV | Crescent vs. KBC Ancora | Crescent vs. Ackermans Van Haaren |
| Home Invest vs. Cofinimmo SA | Home Invest vs. Care Property Invest | Home Invest vs. Aedifica | Home Invest vs. Montea CVA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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