Correlation Between UCB SA and Belysse Group
Can any of the company-specific risk be diversified away by investing in both UCB SA and Belysse Group 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 UCB SA and Belysse Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UCB SA and Belysse Group NV, you can compare the effects of market volatilities on UCB SA and Belysse Group 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 UCB SA with a short position of Belysse Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of UCB SA and Belysse Group.
Diversification Opportunities for UCB SA and Belysse Group
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UCB and Belysse is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding UCB SA and Belysse Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belysse Group NV and UCB SA 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 UCB SA are associated (or correlated) with Belysse Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belysse Group NV has no effect on the direction of UCB SA i.e., UCB SA and Belysse Group go up and down completely randomly.
Pair Corralation between UCB SA and Belysse Group
Assuming the 90 days trading horizon UCB SA is expected to generate 0.38 times more return on investment than Belysse Group. However, UCB SA is 2.6 times less risky than Belysse Group. It trades about 0.19 of its potential returns per unit of risk. Belysse Group NV is currently generating about 0.03 per unit of risk. If you would invest 10,708 in UCB SA on August 29, 2024 and sell it today you would earn a total of 7,517 from holding UCB SA or generate 70.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.53% |
| Values | Daily Returns |
UCB SA vs. Belysse Group NV
Performance |
| Timeline |
| UCB SA |
| Belysse Group NV |
UCB SA and Belysse Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UCB SA and Belysse Group
The main advantage of trading using opposite UCB SA and Belysse Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UCB SA position performs unexpectedly, Belysse Group 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 Belysse Group will offset losses from the drop in Belysse Group's long position.The idea behind UCB SA and Belysse Group NV 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.| Belysse Group vs. Biocartis Group NV | Belysse Group vs. Celyad SA | Belysse Group vs. Argen X | Belysse Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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