Correlation Between Sofina Socit and Care Property
Can any of the company-specific risk be diversified away by investing in both Sofina Socit and Care Property 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 Sofina Socit and Care Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sofina Socit Anonyme and Care Property Invest, you can compare the effects of market volatilities on Sofina Socit and Care Property 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 Sofina Socit with a short position of Care Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Care Property.
Diversification Opportunities for Sofina Socit and Care Property
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sofina and Care is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Care Property Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Care Property Invest and Sofina Socit 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 Sofina Socit Anonyme are associated (or correlated) with Care Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Care Property Invest has no effect on the direction of Sofina Socit i.e., Sofina Socit and Care Property go up and down completely randomly.
Pair Corralation between Sofina Socit and Care Property
Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to generate 0.74 times more return on investment than Care Property. However, Sofina Socit Anonyme is 1.34 times less risky than Care Property. It trades about -0.17 of its potential returns per unit of risk. Care Property Invest is currently generating about -0.13 per unit of risk. If you would invest 23,160 in Sofina Socit Anonyme on August 27, 2024 and sell it today you would lose (980.00) from holding Sofina Socit Anonyme or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. Care Property Invest
Performance |
| Timeline |
| Sofina Socit Anonyme |
| Care Property Invest |
Sofina Socit and Care Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and Care Property
The main advantage of trading using opposite Sofina Socit and Care Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit position performs unexpectedly, Care Property 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 Care Property will offset losses from the drop in Care Property's long position.| Sofina Socit vs. Retail Estates | Sofina Socit vs. Home Invest Belgium | Sofina Socit vs. Shurgard Self Storage | Sofina Socit vs. Vastned Retail Belgium |
| Care Property vs. Home Invest Belgium | Care Property vs. Wereldhav B Sicafi | Care Property vs. Retail Estates | Care Property vs. Exmar NV |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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