Correlation Between Retail Estates and Sofina Socit
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Sofina Socit 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 Sofina Socit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates and Sofina Socit Anonyme, you can compare the effects of market volatilities on Retail Estates and Sofina Socit 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 Sofina Socit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Sofina Socit.
Diversification Opportunities for Retail Estates and Sofina Socit
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Retail and Sofina is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Sofina Socit Anonyme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sofina Socit Anonyme 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 Sofina Socit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sofina Socit Anonyme has no effect on the direction of Retail Estates i.e., Retail Estates and Sofina Socit go up and down completely randomly.
Pair Corralation between Retail Estates and Sofina Socit
Assuming the 90 days trading horizon Retail Estates is expected to generate 6.55 times less return on investment than Sofina Socit. But when comparing it to its historical volatility, Retail Estates is 1.27 times less risky than Sofina Socit. It trades about 0.01 of its potential returns per unit of risk. Sofina Socit Anonyme is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 21,301 in Sofina Socit Anonyme on November 3, 2024 and sell it today you would earn a total of 2,859 from holding Sofina Socit Anonyme or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates vs. Sofina Socit Anonyme
Performance |
| Timeline |
| Retail Estates |
| Sofina Socit Anonyme |
Retail Estates and Sofina Socit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Sofina Socit
The main advantage of trading using opposite Retail Estates and Sofina Socit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Sofina Socit 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 Sofina Socit will offset losses from the drop in Sofina Socit's long position.| Retail Estates vs. Cofinimmo SA | Retail Estates vs. Warehouses de Pauw | Retail Estates vs. Montea CVA | Retail Estates vs. Aedifica |
| Sofina Socit vs. Keyware Technologies NV | Sofina Socit vs. Onward Medical NV | Sofina Socit vs. EVS Broadcast Equipment | Sofina Socit vs. Ion Beam Applications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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