Correlation Between Retail Estates and Elia Group
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Elia 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 Elia 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 Elia Group SANV, you can compare the effects of market volatilities on Retail Estates and Elia 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 Elia Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Elia Group.
Diversification Opportunities for Retail Estates and Elia Group
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Retail and Elia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Elia Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elia Group SANV 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 Elia Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elia Group SANV has no effect on the direction of Retail Estates i.e., Retail Estates and Elia Group go up and down completely randomly.
Pair Corralation between Retail Estates and Elia Group
Assuming the 90 days trading horizon Retail Estates is expected to under-perform the Elia Group. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates is 1.93 times less risky than Elia Group. The stock trades about -0.33 of its potential returns per unit of risk. The Elia Group SANV is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 9,325 in Elia Group SANV on August 29, 2024 and sell it today you would lose (600.00) from holding Elia Group SANV or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates vs. Elia Group SANV
Performance |
| Timeline |
| Retail Estates |
| Elia Group SANV |
Retail Estates and Elia Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Elia Group
The main advantage of trading using opposite Retail Estates and Elia Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Elia 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 Elia Group will offset losses from the drop in Elia Group's long position.| Retail Estates vs. Cofinimmo SA | Retail Estates vs. Warehouses de Pauw | Retail Estates vs. Montea CVA | Retail Estates vs. Aedifica |
| Elia Group vs. Ackermans Van Haaren | Elia Group vs. Groep Brussel Lambert | Elia Group vs. Sofina Socit Anonyme | Elia Group vs. ageas SANV |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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