Correlation Between Smartphoto Group and Wereldhav
Can any of the company-specific risk be diversified away by investing in both Smartphoto Group and Wereldhav 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 Smartphoto Group and Wereldhav into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartphoto Group NV and Wereldhav B Sicafi, you can compare the effects of market volatilities on Smartphoto Group and Wereldhav 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 Smartphoto Group with a short position of Wereldhav. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartphoto Group and Wereldhav.
Diversification Opportunities for Smartphoto Group and Wereldhav
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Smartphoto and Wereldhav is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Smartphoto Group NV and Wereldhav B Sicafi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wereldhav B Sicafi and Smartphoto Group 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 Smartphoto Group NV are associated (or correlated) with Wereldhav. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wereldhav B Sicafi has no effect on the direction of Smartphoto Group i.e., Smartphoto Group and Wereldhav go up and down completely randomly.
Pair Corralation between Smartphoto Group and Wereldhav
Assuming the 90 days trading horizon Smartphoto Group NV is expected to generate 0.72 times more return on investment than Wereldhav. However, Smartphoto Group NV is 1.4 times less risky than Wereldhav. It trades about -0.2 of its potential returns per unit of risk. Wereldhav B Sicafi is currently generating about -0.21 per unit of risk. If you would invest 2,480 in Smartphoto Group NV on August 29, 2024 and sell it today you would lose (70.00) from holding Smartphoto Group NV or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartphoto Group NV vs. Wereldhav B Sicafi
Performance |
| Timeline |
| Smartphoto Group |
| Wereldhav B Sicafi |
Smartphoto Group and Wereldhav Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartphoto Group and Wereldhav
The main advantage of trading using opposite Smartphoto Group and Wereldhav positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartphoto Group position performs unexpectedly, Wereldhav 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 Wereldhav will offset losses from the drop in Wereldhav's long position.| Smartphoto Group vs. EVS Broadcast Equipment | Smartphoto Group vs. Tessenderlo | Smartphoto Group vs. Deceuninck | Smartphoto Group vs. Sipef NV |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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