Correlation Between Proximus and Etablissementen Franz
Can any of the company-specific risk be diversified away by investing in both Proximus and Etablissementen Franz 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 Proximus and Etablissementen Franz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proximus NV and Etablissementen Franz Colruyt, you can compare the effects of market volatilities on Proximus and Etablissementen Franz 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 Proximus with a short position of Etablissementen Franz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proximus and Etablissementen Franz.
Diversification Opportunities for Proximus and Etablissementen Franz
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Proximus and Etablissementen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Proximus NV and Etablissementen Franz Colruyt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etablissementen Franz and Proximus 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 Proximus NV are associated (or correlated) with Etablissementen Franz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etablissementen Franz has no effect on the direction of Proximus i.e., Proximus and Etablissementen Franz go up and down completely randomly.
Pair Corralation between Proximus and Etablissementen Franz
Assuming the 90 days trading horizon Proximus NV is expected to under-perform the Etablissementen Franz. In addition to that, Proximus is 1.29 times more volatile than Etablissementen Franz Colruyt. It trades about -0.25 of its total potential returns per unit of risk. Etablissementen Franz Colruyt is currently generating about -0.28 per unit of volatility. If you would invest 4,378 in Etablissementen Franz Colruyt on October 26, 2024 and sell it today you would lose (834.00) from holding Etablissementen Franz Colruyt or give up 19.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proximus NV vs. Etablissementen Franz Colruyt
Performance |
| Timeline |
| Proximus NV |
| Etablissementen Franz |
Proximus and Etablissementen Franz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proximus and Etablissementen Franz
The main advantage of trading using opposite Proximus and Etablissementen Franz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proximus position performs unexpectedly, Etablissementen Franz 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 Etablissementen Franz will offset losses from the drop in Etablissementen Franz's long position.| Proximus vs. Bpost NV | Proximus vs. Etablissementen Franz Colruyt | Proximus vs. ageas SANV | Proximus vs. KBC Groep NV |
| Etablissementen Franz vs. KBC Groep NV | Etablissementen Franz vs. Proximus NV | Etablissementen Franz vs. ageas SANV | Etablissementen Franz vs. Solvay SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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