Correlation Between Sofina Socit and GIMV NV
Can any of the company-specific risk be diversified away by investing in both Sofina Socit and GIMV NV 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 GIMV NV 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 GIMV NV, you can compare the effects of market volatilities on Sofina Socit and GIMV NV 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 GIMV NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and GIMV NV.
Diversification Opportunities for Sofina Socit and GIMV NV
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sofina and GIMV is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and GIMV NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GIMV NV 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 GIMV NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GIMV NV has no effect on the direction of Sofina Socit i.e., Sofina Socit and GIMV NV go up and down completely randomly.
Pair Corralation between Sofina Socit and GIMV NV
Assuming the 90 days trading horizon Sofina Socit Anonyme is expected to under-perform the GIMV NV. But the stock apears to be less risky and, when comparing its historical volatility, Sofina Socit Anonyme is 1.23 times less risky than GIMV NV. The stock trades about -0.23 of its potential returns per unit of risk. The GIMV NV is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 3,920 in GIMV NV on August 24, 2024 and sell it today you would lose (45.00) from holding GIMV NV or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sofina Socit Anonyme vs. GIMV NV
Performance |
| Timeline |
| Sofina Socit Anonyme |
| GIMV NV |
Sofina Socit and GIMV NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sofina Socit and GIMV NV
The main advantage of trading using opposite Sofina Socit and GIMV NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit position performs unexpectedly, GIMV NV 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 GIMV NV will offset losses from the drop in GIMV NV's long position.| Sofina Socit vs. Ion Beam Applications | Sofina Socit vs. Onward Medical NV | Sofina Socit vs. EVS Broadcast Equipment | Sofina Socit vs. Retail Estates |
| GIMV NV vs. Groep Brussel Lambert | GIMV NV vs. Ackermans Van Haaren | GIMV NV vs. Sofina Socit Anonyme | GIMV NV vs. Brederode SA |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |