Correlation Between UCB SA and Banque Nationale
Can any of the company-specific risk be diversified away by investing in both UCB SA 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 UCB SA and Banque Nationale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UCB SA and Banque nationale de, you can compare the effects of market volatilities on UCB SA 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 UCB SA with a short position of Banque Nationale. Check out your portfolio center. Please also check ongoing floating volatility patterns of UCB SA and Banque Nationale.
Diversification Opportunities for UCB SA and Banque Nationale
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UCB and Banque is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding UCB 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 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 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 UCB SA i.e., UCB SA and Banque Nationale go up and down completely randomly.
Pair Corralation between UCB SA and Banque Nationale
Assuming the 90 days trading horizon UCB SA is expected to generate 1.35 times more return on investment than Banque Nationale. However, UCB SA is 1.35 times more volatile than Banque nationale de. It trades about 0.11 of its potential returns per unit of risk. Banque nationale de is currently generating about -0.2 per unit of risk. If you would invest 17,680 in UCB SA on September 1, 2024 and sell it today you would earn a total of 855.00 from holding UCB SA or generate 4.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UCB SA vs. Banque nationale de
Performance |
| Timeline |
| UCB SA |
| Banque nationale |
UCB SA and Banque Nationale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UCB SA and Banque Nationale
The main advantage of trading using opposite UCB SA and Banque Nationale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UCB SA 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 UCB 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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