Correlation Between Softimat and Banque Nationale
Can any of the company-specific risk be diversified away by investing in both Softimat and Banque Nationale 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 Softimat and Banque Nationale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Softimat SA and Banque nationale de, you can compare the effects of market volatilities on Softimat and Banque Nationale 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 Softimat with a short position of Banque Nationale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Softimat and Banque Nationale.
Diversification Opportunities for Softimat and Banque Nationale
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Softimat and Banque is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Softimat SA and Banque nationale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banque nationale and Softimat 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 Softimat SA are associated (or correlated) with Banque Nationale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banque nationale has no effect on the direction of Softimat i.e., Softimat and Banque Nationale go up and down completely randomly.
Pair Corralation between Softimat and Banque Nationale
Assuming the 90 days trading horizon Softimat SA is expected to generate 0.69 times more return on investment than Banque Nationale. However, Softimat SA is 1.45 times less risky than Banque Nationale. It trades about 0.01 of its potential returns per unit of risk. Banque nationale de is currently generating about -0.46 per unit of risk. If you would invest 95.00 in Softimat SA on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Softimat SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Softimat SA vs. Banque nationale de
Performance |
| Timeline |
| Softimat SA |
| Banque nationale |
Softimat and Banque Nationale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Softimat and Banque Nationale
The main advantage of trading using opposite Softimat and Banque Nationale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Softimat position performs unexpectedly, Banque Nationale 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 Banque Nationale will offset losses from the drop in Banque Nationale's long position.The idea behind Softimat SA and Banque nationale de pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Banque Nationale vs. GIMV NV | Banque Nationale vs. Sofina Socit Anonyme | Banque Nationale vs. Groep Brussel Lambert | Banque Nationale vs. Tubize Fin |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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