Correlation Between Retail Estates and Belysse Group
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Belysse Group 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 Retail Estates and Belysse Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates and Belysse Group NV, you can compare the effects of market volatilities on Retail Estates and Belysse Group 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 Retail Estates with a short position of Belysse Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Belysse Group.
Diversification Opportunities for Retail Estates and Belysse Group
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retail and Belysse is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Belysse Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belysse Group NV and Retail Estates 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 Retail Estates are associated (or correlated) with Belysse Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belysse Group NV has no effect on the direction of Retail Estates i.e., Retail Estates and Belysse Group go up and down completely randomly.
Pair Corralation between Retail Estates and Belysse Group
Assuming the 90 days trading horizon Retail Estates is expected to generate 0.26 times more return on investment than Belysse Group. However, Retail Estates is 3.84 times less risky than Belysse Group. It trades about -0.33 of its potential returns per unit of risk. Belysse Group NV is currently generating about -0.17 per unit of risk. If you would invest 6,350 in Retail Estates on August 29, 2024 and sell it today you would lose (490.00) from holding Retail Estates or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 78.26% |
| Values | Daily Returns |
Retail Estates vs. Belysse Group NV
Performance |
| Timeline |
| Retail Estates |
| Belysse Group NV |
Retail Estates and Belysse Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Belysse Group
The main advantage of trading using opposite Retail Estates and Belysse Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Belysse Group 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 Belysse Group will offset losses from the drop in Belysse Group's long position.| Retail Estates vs. Cofinimmo SA | Retail Estates vs. Warehouses de Pauw | Retail Estates vs. Montea CVA | Retail Estates vs. Aedifica |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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